Family Law Matters

 Valuation Fair Market Value: Recreational value vs. Cost Approach as Working Ranch Marriage of Ortiz 282 Mont. 500, 938 P.2d 1308 (1997) dealt with value of a 709 acre ranch. The parties had lived there, but it was not an economically viable operation and the trial court ordered it sold. Husband’s expert using a “cost” valuation approach assumed that the ranch would continue to be used as a ranch, and valued on the basis of predictable stream of income from ranching operation. Wife’s realtor expert did a CMA based upon comparable sales, with the idea that the place would bring the most money on the market as recreational land. The Court approved Fair Market Value adopted by District Court.     

  Valuation Minority Discount Wrong  Marriage of Taylor 257 Mont. 122, 848 P.2d 478 ( Mont. 1993). The bee farm case. Discounting minority shareholder value in a closely held corporation is inappropriate when the party’s interest is valued based on the underlying assets of the corporation, not the value of his or her stock. When the corporation is burdened with debt to the relatives of a party, but the debt is not always or consistently reported on the company financials, proper for the trial court to ignore it. Affirmed a cash award to the wife where husband complained on appeal she should have received stock. His family’s corporation had never declared a dividend. Awarding part of a minority interest in stock in a closely held corporation that had never declared a dividend to the other party is not something a trial court should do.  Justice Trieweiller dissented, noting the both experts doubted the stock could be sold. He argued that wife should have gotten stock. Husband had ess

 Valuation Discount for Minority Interest Marriage of Davies 266 Mont. 466, 880 P.2d. 1368 (1994) held that a discount for minority interest is not to be used when the owner of the interest has effective control over: salaries, dividends, profit distribution and d ay-to-day business operations . Only where In fact it is only appropriate to discount shares when there is the absence of control. The Court also noted that the discount should be used in cases where there are no real comparable actual sales and the value of the business must be computed.  Here husband had effective control over two farm and ranch corporations. His employment contract gave him broad legal authority over the running of the whole operation. Held improper for the district court to discount the value of his shares.    Marriage of Danelson 253 Mont. 310  Essentially makes the same point as Davies later: that control is key. If a minority shareholder nevertheless exercises effective control, there should

Valuation Valuing Contract for Deed  Marriage of O’Neil 277 Mont. 13, 917 P.2d 916 (1996) Here the parties sold a bar on a contract for deed. District Court valued the contract by simply multiplying the number of payments due (192) times the monthly payment. 277 Mont 13.doc - multiplying_monthly_payments . The Supreme Court held that to be error. The remaining principal balance on a contract is acceptable value to use, but not the future interest and fees. 277 Mont 13.doc - remaining_balance   O'Neil v. O'Neil, 917 P.2d 916, 277 Mont. 13 (Mont. 1996)