The Perils of a Party Doing their Own Business Valuation in a Dissolution Action Kwak v. Bozarth is an unpublished Massachusetts case. The trial court made several decisions based on unavailable data. The case illustrates the perils of a party in a martial dissolution acting as their own expert and underscores the importance of how the standard of review affects an appellate panel’s review of the trial court decision. Valuation professionals often say that valuing privately owned businesses is a blend of science and judgment. Kwak v. Bozarth, 2023 Mass. App. Unpub. LEXIS 179; 102 Mass. App. Ct. 1116; 2023…
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Why it Matters Distinguishing between enterprise (or business) goodwill and personal (or professional) goodwill can sometimes be difficult. That distinction is often necessary in marital dissolution and shareholder dispute cases, and when a business is sold. For valuation purposes, the classification is important because prospective buyers will only pay for goodwill that is transferable. In addition, there are tax implications associated with the classification. This article provides an overview of the importance of understanding how to classify goodwill and issues that arise in litigation. When is it Necessary? Distinguishing between enterprise (or business) goodwill and personal (or professional) goodwill can…