Fair Market Value

News & Analysis as of

Laboratory Discount Arrangements Survive Antikickback Statute Scrutiny

There has been question for some time whether in evaluating certain discount arrangements involving clinical laboratory tests under the federal antikickback statute (FAS), discount charges should be measured against the...more

Six Considerations for Rent Arbitration Clauses in Commercial Leases

When a commercial tenant exercises an option to renew a lease it is imperative that the landlord and tenant have effective mechanisms in place to determine the rent for the renewal term. Ideally both parties will agree on the...more

The Ropes Recap: Mergers & Acquisition Law News - Second Quarter 2014

In this issue: -Delaware Legislative Update -Delaware Supreme Court Upholds Facial Validity of Fee-Shifting Provisions in Bylaws of Delaware Non-Stock Corporation -News from the Courts: -Court...more

What Donors Need to Know About Appreciated Property

Individuals considering gifts of appreciated property to charity should be aware that not all property donations are treated equally for income tax purposes. Depending on the class of property, prior use, the donor’s holding...more

Sixth Circuit Holds That Declines in Market Value are Not a Factor in Determining Actual Cash Value

In a case of first impression in Michigan, the federal Court of Appeals determined last month that general market conditions could not be considered when calculating actual cash value. In Whitehouse Condominium Group, LLC v....more

Possible Offshore Deferrals for Hedge Fund Managers – IRS Confirms That Certain Stock Options and Stock Appreciation Rights Are...

The Internal Revenue Service (the "IRS") has issued Revenue Ruling 2014-18 (the "Ruling"), which generally confirms that a stock-settled stock option or stock appreciation right that is granted with an exercise/base price of...more

Sustainability Reporting–Something to Consider

It’s common knowledge that investors, analysts and other stakeholders view certain non-financial information as increasingly important indicators of a company’s long-term value. This information tends to be grouped into three...more

Laidler v. Hesco Bastion Environmental, Inc., C.A. No. 7561-VCG (Del. Ch. May 12, 2014) (Glasscock, V.C.)

In this memorandum opinion, the Court of Chancery determined the fair value of the petitioner’s stock in a statutory appraisal proceeding arising from the short-form merger of Hesco Bastion USA, Inc. (the “Company”) into the...more

Texas Supreme Court Enforces Waiver Of Post-Foreclosure Fair Market Value Hearing

On June 13, 2014, the Texas Supreme Court, consistent with its long-standing “respect for the strong public policy [in Texas] of respecting parties’ freedom to design contracts according to their wishes,” held that a broad,...more

Can an HOA "Super-Priority" Lien Extinguish a Lender's Deed?

It is hard to imagine that a lender’s first-position deed of trust on a residence worth hundreds of thousands of dollars could be extinguished by a homeowners’ association (HOA) lien for overdue neighborhood assessments,...more

Flash Boys and the Transportation Corridor Act

Michael Lewis' new book, Flash Boys concerns high frequency traders using advance notice of a stock purchase to reap extra profits. Fittingly, the North Carolina Supreme Court's decision in Beroth Oil v. NCDOT was published...more

Fannie Mae, Freddie Mac Clarify Rural Property Appraisal Requirements

On April 1, Freddie Mac issued Bulletin 2014-05, and on March 25, Fannie Mae issued Lender Letter LL-2014-02, in response to directives from the FHFA to clarify certain requirements related to appraisals for properties...more

An Exception to the Fair Market Value Rule: Use the Foreclosure Sales Price for a Deficiency after a Third Party Purchaser

If the value of a foreclosed property is less than the loan amount, lenders may seek a deficiency judgment from borrowers and guarantors after the foreclosure sale. In most cases, the lender is the sole bidder at the sale and...more

Lender’s Title Insurance: When Should Courts Measure the Fair Market Value of Property Affected by a Title Defect?*

Title insurance is designed to pay for damages caused by any defects to title that the title company should have discovered but did not. Lender’s title insurance protects lenders who lose money due to a title defect, which...more

Surprising Ruling By Georgia Court Of Appeals May Allow For Pursuit Of Guarantors Without First Confirming Foreclosure Sale In...

As any lender who’s had a loan secured by real property collateral in Georgia knows, in order to pursue a deficiency balance following a non-judicial foreclosure of its collateral, the foreclosure sale has to be “confirmed”...more

Annual ISO and ESPP Information and Reporting Requirements

Annual Information Statements and IRS Returns - Requirement to Report - For any exercise of an incentive stock option (ISO) or transfer of a share previously purchased pursuant to a tax-qualified employee stock...more

Policemen’s Annuity and Benefit Fund of Chicago, Illinois v. DV Realty Advisors LLC, C.A. No. 7204-VCN (Nov. 27, 2013) (Noble,...

In this letter opinion, the Court of Chancery (1) ruled that the removal of a general partner did not convert the general partner’s interest into a limited partnership interest, and (2) valued the removed general partner’s...more

Prospective Waivers of the Fair Market Value Defense Held Invalid

The Arizona Court of Appeals recently held that commercial borrowers and guarantors cannot prospectively waive their right to limit their damages in a deficiency action on the basis of the fair market value of property sold...more

Shareholder Issues Arise When Full Enterprise Value Fails to Be Assessed

In dissenters' rights actions, shareholder oppression and member disputes as well as in breach of fiduciary duty cases, the fair value of a company becomes center stage for debate. As shareholders and companies keep an eye...more

SDNY Bankruptcy Court Allows as a Claim Unamortized Original Issue Discount Generated in a Fair Market Value Exchange

The Bankruptcy Court for the Southern District of New York overseeing the Residential Capital (“ResCap”) cases issued an opinion on November 15, 2013 (the “Opinion”) allowing the unamortized interest associated with original...more

Tennessee’s Deficiency Statute and Out-of-State Deficiency Judgments

We've previously written about Tenn. Code Ann. § 35-5-118, which governs deficiency suits in Tennessee. As explained in that post, a lender is typically entitled to recover its full deficiency unless the foreclosure sales...more

"Key Man Discount" Factors Critical in Fair Value Business Disputes

Family business disputes oftentimes uncover who is actually calling the shots and making a big difference in the profitability of a company. As described in previous Shareholder Rights blogs, the Wisniewski shareholder...more

Damage Expert Stricken without Leave to Amend after District Court Determines That Expert Over Reached by Using Entire Market...

As this patent infringement action moved closer to trial, the parties filed various motions in limine, including defendant Fortinet Inc.'s motion to strike the report and expert testimony of Network Protection Sciences, LLC's...more

Stewart et al. v. BF Bolthouse Holdco, LLC et al., C.A. No. 8119-VCP (Del. Ch. Aug. 30, 2013) (Parsons, V.C.)

In this memorandum opinion, the Court of Chancery denied the defendants’ motion to dismiss the plaintiffs’ claims that defendants breached a purchase agreement and the company’s LLC agreement by acting in bad faith to...more

Deduction Of Post-Production Costs From Gas Royalties – Another Lesson

Consider this while celebrating the resurrection of Big Tex: When a lease prohibits post-production cost deductions, can a lessee deduct those costs from a lessor’s royalty? Yes, says Potts v. Chesapeake Exploration, L.L.C. ...more

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