What if you own a business and are going through either personal (Chapter 13) or corporate bankruptcy (Chapter 7 or 11)?

 

Did you know that under certain circumstances the intangible goodwill component may be worthless? The only value in your business may be the liquidated value of the tangible assets.

 

Depending on the circumstances, for example, if there is a significant amount of personal goodwill in the business or the owner/ operator refuses to sign a covenant not to compete (CNTC), the valuator can exclude the goodwill of the business altogether. To that end, our business valuations quantify and separate the personal (or professional) goodwill component from the business (or enterprise) goodwill component, so the local team or jurisdiction may decide to include it or exclude it.

 

IRS Revenue Ruling 59-60 (60th revenue ruling in 1959) is currently the most widely cited source of business valuation procedures in the United States for closely-held corporations. While its initial intent was for estate and gift tax calculations, over the years it has been adopted by valuation experts in other areas. Its principles are applicable in the valuation of most closely-held business valuations. To withstand the highest level of scrutiny, not only are our business valuations in compliance with IRS Ruling 59-60, but also with the American Institute Of Certified Public Accountants' (AICPA) Statement on Standards for Valuations Services (SSVS), a widely recognized standard for business valuations.