On August 31, 2023, Justice Platkin of the Albany County Commercial Division issued a decision in Matter of Galasso v. Cobleskill Stone Prods., Inc., 2023 NY Slip Op. 51158(U), analyzing different valuation methods in a business divorce buyout.
As an initial matter, Justice Platkin observed that his “task [wa]s to determine the fair value of the Estate’s shares as of the Valuation Date,” and that “[i]n so doing, the Court must ascertain what a willing purchaser in an arm’s length transaction would offer for” the interest being purchased “as an operating business rather than as a business in the process of liquidation.”
Justice Platkin rejected the respondent’s argument that the valuation should be based on the value of the assets owned by the business, explaining that “respondents inappropriately value CSP as a collection of assets subject to liquidation in an orderly fashion, rather than valuing CSP as a going concern that is actively and successfully engaged in mining, material sales and heavy construction work.”
Justice Platkin instead adopted the income approach to the valuation. The latter portions of the decision contain a detailed analysis of a business valuation based on the income approach.