- 14 - fact specific and are relied on by litigants and courts for generalized guidance, but they do not establish bright-line rules for valuation; i.e., they do not establish specific percentage discounts to be applied under particular factual circumstances. The estate’s expert, Mr. Dorman, mentioned three different approaches in valuing the common stock of Godfrey, to wit: “Market Comparison Approach”, “Adjusted Net Book Value Approach”, and “Capitalized Earnings Approach”.7 Although his report contains some discussion of all three methods, ultimately, he relied solely on the net asset approach. Mr. Dorman rejected the market approach because he could not find what he believed to be comparable companies. Of six comparable companies, he noted that four, unlike Godfrey, reported losses.8 The remaining two were rejected because he “determined that using only the remaining two public companies, Brunswick Corp. and Fountain Powerboat Ind., Inc., would not provide reliable comparable data to arrive at a market measure of value.” Mr. Dorman, even though he labeled the six companies 7 For convenience, we use “market approach”, “net asset approach”, and “income approach” instead of “Market Comparison Approach”, “Adjusted Net Book Value Approach”, and “Capitalized Earnings Approach”, respectively. 8 We find Mr. Dorman’s reason for abandoning the comparable or market approach to be somewhat curious because, in spite of the “comparable companies” losses, respondent’s expert’s calculations with similar comparables resulted in the potential for values that were two to three times the value reached by use of the approach advanced by Mr. Dorman.Page: Previous 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 Next
Last modified: May 25, 2011