BVR Second Annual Divorce Summit

September 25, 2009 | Business Valuation, Divorce, Family Law News, Legal Perspective

Icon for author Brian Vertz Brian Vertz

This weekend I attended the second annual Divorce Summit sponsored by Business Valuation Resources, one of the leading publishers in the bizval field. On Thursday, September 24, 2009, we heard The View from the Bench, giving voice to a group of family law judges from New York, Illinois, Rhode Island, and elsewhere. One of the standouts was the Hon. Edward Jordan, a family law calendar control judge from Cook County, Illinois. His commentary was insightful and pithy, and I was enchanted by the notion of a calendar control judge who could dispatch cases ready for trial to the judges within a few short weeks. 

When the judges had had their say, it was the lawyers’ turn. A panel of AAML divorce lawyers informed the assembly of bizval professionals “What Lawyers Expect from their Financial Experts.”  The breakout sessions on Thursday and Friday were stellar, starting with “Reasonable Compensation in Divorce” by Ron Signeur and Sharyn Maggio. One of the most useful discussions, in my mind, was the itemized lists of criteria that experts and courts may consider when determining reasonable compensation (hint: article forthcoming).

Another of my favorite breakout sessions was Chris Mercer’s and Ashok Abbott’s  seminar on “Active vs. Passive Appreciation.” In most states other than Pennsylvania, the divorce courts distinguish two types of increase in the value of separate assets. Appreciation in value that results from the efforts of a spouse during the marriage are regarded as separate property, while appreciation due to passive factors such as inflation is part of the marital estate. In Pennsylvania, a corollary concept is the Adelstein argument (where a nonmarital asset has experienced a post-separation increase in value). Mercer presented one of the most compelling analyses I have seen on this issue, quantifying the specific dollar amount of passive and active increase based upon the Gordon Growth present value formula. It was brilliant, and in my opinion, just the starting point of an important development in BV technique (hint: another article forthcoming!).

A Friday breakout on “Transmutation and Tracing” was informative and timely, given the proliferation of this concept in divorce litigation. Fact: some litigants in California are commissioning a forensic accounting of their entire marriage to determine whether property was acquired with community funds or separate funds. 

The Thornhill case (in which Colorado refused to adopt a fair value standard in matrimonial litigation) was highlighted in several presentations. I must say this conference was one of the best I have attended in some time.

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