BVR Logo May 11, 2022 | Issue #236-2

BVWire is your go-to source for the latest in the business valuation profession. Highlights for this week include:

Study says there is ‘clear evidence’ of bias among BV experts

Researchers say they have found “clear evidence for the existence of … engagement bias” in valuation professionals who were assigned randomly to perform valuation tasks on behalf of a buyer or a seller. The study has been published in the Journal of Behavioral Finance.

The researchers state that “valuators appear to be affected by their clients’ interests, such that they indicate that a valuation should be adjusted in accordance with their clients’ interests. Specifically, when they represent a buyer and therefore have an incentive to lower the value of the shares, they also indicate the valuation should be adjusted downwards more heavily and also indicate a lower value range for the true value of the company. The opposite is the case when they represented the seller.”

Also, the study found that experts exhibited a “blind spot” for their own potential bias: “Whereas 58.7% believed the valuator representing the opposing party was biased, only 25.1% believed they themselves were biased.”

The study’s authors are Marc J. R. Broekema, Niek Strohmaier, Jan A. A. Adriaanse, and Jean-Pierre I. van der Rest (all Leiden University). The paper is “Are Business Valuators Biased? A Psychological Perspective on the Causes of Valuation Disputes.” A full copy is available if you click here.

IP damages expert Bania testifies in Johnny Depp-Amber Heard trial

One of BVR’s authors, Douglas Bania, testified that ex-wife Amber Heard’s allegations of abuse damaged Johnny Depp’s image. Bania is an expert in intellectual property (IP) damages and valuation and is one of the founders of Nevium Intellectual Property Consultants.

Damaged goods: Using some eye-catching charts, Bania showed the jury his analysis of Depp’s Q scores (a measure of familiarity and public appeal) and Google search results. His analysis showed that, before May 2016 (when Heard filed for a restraining order), Depp had largely positive and ordinary search results. But, after that, his search results revealed much more negative news coverage and his Q scores dropped—and it got worse after the op-ed Heard wrote in late 2018. Bottom line: The public perception of Depp has been damaged. You can watch a video of his testimony if you click here (at 46:47).

His testimony gave an interesting look at the use of internet analytic tools in matters such as these. Bania, along with Brian Buss (also with Nevium), co-wrote two chapters on IP damages in BVR’s Comprehensive Guide to Economic Damages, 6th edition.

Delaware Chancery rejects partnership valuation in a freeze-out

In a coordinated action involving 13 partnerships that were involved in freeze-out transactions by AT&T of minority shareholders, the court found that AT&T breached its fiduciary duties and effectuated the freeze-out through an unfair process and by paying an unfair price. The freeze-out was subject to the entire fairness standard of review, and AT&T bore the burden of proving that the freeze-out was entirely fair to the minority partners. AT&T failed in that proof and thereby sought to capture future value for itself. The lead partner of the valuation firm had a long-standing relationship with AT&T, and internal AT&T personnel influenced the outcome of the valuation. The court determined the fair value of the interest as a remedy to the situation, awarding more than triple the amount originally paid to partners who were squeezed out.

The case is In Re Cellular Tel. P’ship Litig., 2022 Del. Ch. LEXIS 56. This is a long case opinion that involves many issues of interest to valuation professionals. The June 2022 issue of Business Valuation Update will have a case digest as well as commentary by Gil Matthews (Sutter Securities) and BVR legal editor Jim Alerding (Alerding Consulting).

More business owners deciding to sell, most retiring

The long anticipated “Silver Tsunami” wave of retiring baby boomers appears to be arriving and is expected to supply the market with a steady stream of available businesses throughout the year, according to a report from BizBuySell. An increasing number of small business owners, many aging and no longer willing to wait on the sidelines, believe now is the time to exit. Of surveyed owners, over 63% say they are over 50 years old and 30% say they are over age 60. More than a third (37%) say they plan to sell within two years. Of owners recently surveyed, the majority (55%) cite retirement as their motivation for selling, while a substantial 31% say their business is doing well and feel they can currently receive a good price. Active for-sale inventory has climbed 10% over the past year, the report says

Reminder: Comments due on TAF exposure draft

Comments on the exposure draft, “Understanding the Differences: Conclusion of Value v. Value Calculations,” are due May 26. The Business Valuation Resource Panel of The Appraisal Foundation wrote the draft. A copy of the exposure draft is available if you click here.

To submit a comment, TAF has a special form that is available if you click here.

Conference season is here!

Two upcoming conferences of note (click the links for more information and to register):

  1. Tomorrow, Thursday, May 12, is the Houston ASA Energy Valuation Conference: A BVR Live Webcast, a full-day event—the 12th year for this event—presenting leading-edge valuation techniques applicable to all sectors of the energy industry (nine CPE credits available); and
  2. On Monday, May 16, the annual New York State Society of CPAs’ Business Valuation and Litigation Services Conference will be webcast. This full-day conference will feature many topics including an update on BV-related court cases, tax litigation involving valuation issues, SPAC warrant valuations, debt valuation, control premiums, exit planning, and more (eight CPE credits available).

Valuing early-stage firms: full-day seminar from Malaysia

The valuation of early-stage companies is the focus of a full-day seminar August 17 in Malaysia. The speaker will be Adie Gupta, co-founder and managing director of Spring Galaxy, a valuation and strategic advisory firm. Attendance options are on-site and virtual. The full agenda and registration information are available if you click here. The Business Valuers Association Malaysia (BVAM) organized the seminar.

BV movers . . .

People: Mark Rupolo, CPA, ABV, PFS, has been admitted as a partner at Minneapolis-based Lurie LLP; he is the managing director of the firm’s Fort Myers, Fla., office and has more than 30 years of experience working with individuals and small businesses on all aspects of their accounting, taxes, and financial planning … Rand Gambrell, CPA, ABV, CFE, CFF, has been promoted to a managing director at BKD LLP; he is a member of BKD’s Forensics & Valuation Services in the firm’s Denver office, where he provides business valuation services, forensic accounting, economic damage analysis, fraud auditing, and bankruptcy and restructuring services and has served as an expert witness.

Firms: In a major deal expected to close this summer, New York City-based Marcum LLP is adding fellow New York City-based Friedman LLP; the combined firm will operate under the Marcum brand and employ nearly 3,400 staff members … St. Louis-based RubinBrown LLP is adding Kansas City, Mo.-based JMW & Associates, a firm that specializes in working with high-net-worth individuals and families, and family office groups, on tax and wealth planning services … Los Angeles-based MGO LLP has acquired San Rafael, Calif.-based Eckhoff & Co. CPAs and Advisors, which provides tax and accounting solutions to individuals and businesses throughout the San Francisco Bay area, including real estate entities and high-net-worth individuals.

Please send your professional and firm news to us at

CPE events

BVR is pleased to partner with the Houston chapter of the ASA to present the webcast of the 2022 ASA Energy Valuation Conference. The conference agenda features presentations from nationally recognized speakers who are profession leaders, covering a range of important topics within the industry.

The special considerations in performing valuations of ownership interests for gift and estate purposes are discussed.

ASA 2021 International Conference

We welcome your feedback and comments. Contact Andy Dzamba (Executive Editor) at:


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