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Court finds no error in valuation of business using SEV method in divorce proceeding

"Keeping in mind that a court has great latitude in determining the value of a business in dividing marital property," the court held that there was no error warranting reversal - the trial court's valuation of one of the parties' businesses (Finesse) was within the range established by the proofs. Thus, it affirmed a judgment of divorce and associated postjudgment orders entered by the trial court. The parties owned several trucking and logistics companies during the marriage, all of which were awarded to the defendant-ex-husband. He was the sole shareholder of two of the largest revenue-generating businesses, one of which was Finesse. On appeal, he argued that the trial court overvalued Finesse by $2.2 million and that the SEV approach used by plaintiff-ex-wife's expert (the "rule-of-thumb approach") violated established professional standards for CPAs as provided by the SSVS1, published by the American Institute of CPAs. He also claimed that his expert was better qualified than plaintiff's expert to offer an opinion on the real estate value of Finesse because he was a certified commercial real estate appraiser, while plaintiff's expert did not claim to have this expertise. The court initially noted that defendant did not "direct us to any authority that precludes the use of SEVs in valuing real property for purposes of property division in divorce actions, nor are we aware of any such authority." Case law indicates that "SEVs can be used by a trial court in setting the value of property." As to his argument that using an SEV approach violated established, published standards set forth in the SSVS1, one of defendant's other experts read directly from the SSVS1 regarding rule-of-thumb approaches such as the SEV approach, stating, "'A rule of thumb is typically a reasonableness check against other methods used and should generally not be used as the only method to estimate the value of a subject interest.'" Thus, the SSVS1 did not absolutely prohibit rule-of-thumb approaches as suggested by defendant. Further, the trial court's decision to use the valuation proffered by plaintiff's expert was not based on a conclusion that her "expert had superior credentials, nor that an SEV approach was necessarily and generally superior to an income approach. Rather, the trial court was concerned with problematic aspects of the valuation provided by defendant's expert, rightfully so in our view, given that it was a bit outdated and, more importantly, that it failed to fully take into account the actual circumstances involving the real estate." Also, the "negative equity valuation argued by defendant was absurdly inconsistent with the 2010-2011 financial statements showing shareholder equity in Finesse to be $1.4 million."

Antenuptial agreement held to be valid and enforceable

The court held that the parties' antenuptial agreement was valid and enforceable, concluding that to invalidate it on the basis of one party's fault would contravene the agreement's clear and unambiguous language, and that as a matter of law, the...

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