Roberts v. Roberts - 2010
The divorce case of Roberts v. Roberts was filed Nov. 29, 2010 by the Tennessee Court of Appeals Eastern Section.
On appeal, Husband argued that the goodwill attributed to his business interest by the trial court was personal to him. Personal goodwill has generally not been allowed as a divisible marital asset in Tennessee. In our interpretation, the Court decided that even though a business may be dependent upon the "person and personality of the spouse practicing the profession", that "single rule" was not enough to overturn the trial court's ruling of a value of $600,000. The valuation analyst apparently did account for the sole-owner risk by taking a 35% discount off the total or enterprise value.
The case arguably changes an important aspect of Tennessee business valuation case law by apparently allowing some personal goodwill value in a sole-owner business even if it is dependent upon one person; however, the risks associated with the one person should be accounted for with a discount according to the circumstances in this decision.
