ComStock Advisors assists boards of directors, trustees, buyers, and other parties who request opinions for mergers, buybacks, divestitures, acquisitions, reorganizations, and large stock purchase transactions. Our expertise in valuing companies and their underlying securities provides us with the experience required to advise our clients on these complex transactions.
Fairness opinions include a valuation of the company and an analysis of the financial structure of the transaction including the form of the consideration received. Forms of consideration may include cash, notes, warrants, and equity securities.
Other issues of relative fairness, such as the pricing of the debt and the terms of employment and non-compete agreements may be addressed. We also review the relative fairness among investors with the same or different classes of stock.
A business valuation is required for filing the estate tax return at the time of death. Under some circumstances, a revaluation may also be required as of the alternative valuation date six months after the date of death.
ComStock Advisors’ professionals are experienced at preparing independent valuations for federal and state estate tax purposes and are prepared to defend our work in the event of an audit by the U.S. Internal Revenue Service and state taxing authorities.
Buy-sell agreements are typically agreements among business owners or between the company and its owners. The defined value in these agreements can be based on business valuations, although there are formulas and other methods of establishing how one owner can depart a business on a pre-agreed basis. If an agreed method of establishing value does not pass certain tests contained in the IRS regulations, it might not be able to be used as the basis for determining fair market value for estate and gift tax purposes.
Also, a formula may not pass the test of time due to changes in the company, the industry, or the economy as a whole. An old formula may no longer produce reasonable results. As a result, periodic valuations may be appropriate to reestablish the value used in the buy-sell agreement or to validate the formula used in the agreement.
To properly administer an investment held in trust, a review of each asset needs to be performed on a periodic basis. For federally chartered banks, all assets normally must be reviewed upon acceptance of a new account, and at least annually thereafter. For privately held companies this task is often difficult, and information about the company may be hard to obtain. ComStock Advisors reviews the assets and provides valuation calculations as part of the process.
Distributions from a trust or estate are not always proportionate. Some beneficiaries, like those who are involved in a family business, may get stock in the private company while other beneficiaries who are not involved in the business may receive other assets of the trust or estate, such as marketable securities. ComStock Advisors provides fiduciaries with an opinion on value for the private business interest, taking into consideration the level of ownership and degree of marketability. This assists the fiduciary in making equitable distributions.