Divorce Litigation

Quantifying Economic Damages: A Federal Case Study

Louis J. Cercone, CPA, CFE, CFF, ABV, ASA, CVA

Does a business need to be completely destroyed to recoup economic damages incurred in a business tort claim? A recent federal court ruling awarded a plaintiff damages based on the value of the business prior to the defendants' alleged wrongdoing — even though the business continued to operate.

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Timing Counts When Classifying Property in Divorce

Louis J. Cercone, CPA, CFE, CFF, ABV, ASA, CVA

Business interests acquired and nurtured during marriage are generally classified as marital property in most jurisdictions. But what if a couple owns a business that's sold prior to settling their divorce and the sale includes "earnout" payments that are contingent on future performance? Minnesota's Supreme Court addressed this issue in a recent high-profile case. 

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Measure Owners’ Compensation With the Independent Investor Test

Douglas P. Sosnowski, CPA/ABV, ASA, CFF

The U.S. Tax Court recently addressed the issue of reasonable compensation. This is a subjective matter that is closely related to replacement compensation for shareholder disputes and divorce cases. Here, we list five factors to consider when determining reasonable compensation and explain how experts use the independent investor test to support their positions with objective market evidence. The independent investor test can also be used to determine replacement compensation.

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Estimating Replacement Compensation in Divorce

Replacement compensation can be an important, but contentious, issue in divorce proceedings. It provides the basis for child support and alimony awards. And it affects the value of business interests that may (or may not) be included in the marital estate. Here's what you should know to help ensure an equitable settlement -- and how a financial expert can help you get it right.

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Valuation Issues in Divorce

In some ways, valuing a closely held business in a divorce case is like the Wild West. That's because the cases are subject to the laws and rules of particular states or jurisdictions. The rules are complex and depend not just on state law, but on whether the business is a sole proprietorship, partnership, S corporation, C corporation or LLC. 

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