Good Will in a Business

Orange County family law

Good Will in a Business

Community Development Com. v. Asaro is not a family law case. However, its holding can be considered in a family law case when the valuation of a business is at issue.

The Asaros owned a restaurant in National City. Under California’s redevelopment law, the Commission found that the area to be blighted and filed a complaint in eminent domain. The issue in this case was the value of lost goodwill as a result of the condemnation.

The Asaros’ economist found that the loss of income stream was $110,000 and applied a 14 percent capitalization rate. He stated that the good will in the business was approximately $775,000. Their CPA testified that the income stream was $93,000 and applied a capitalization rate of 9 percent finding good will to be $963,000. The Commission’s expert’ testified that the yearly income was $96,359 and applied a 50 percent capitalization rate finding the good will value to be $164,356.The trial court found that the commissioner’s expert had examined the neighborhood and took their good will estimate and set the loss of goodwill to $328,712 by using a capitalization rate of 25 percent.

The Fourth District upheld this order and found that there is more than one way to value goodwill in a business. The trial court has the ability to determine the value of the goodwill as long as there is sufficient evidence to support the findings.

If you need legal advice and are looking for a family law lawyer in Orange County to address a dissolution issue such as the division of a family business or any other divorce matter such as legal separation, annulment, child support, custody, spousal support and/or property division, please consider Treviño Law in your divorce attorney search. We are located in Laguna Hills right off Lake Forest exit to both the 405 and 5 freeway.

Although the posting of this information can be considered free legal advice for a divorce in Orange County, it does not address other factors which may play a significant role in a particular dissolution. Circumstances in your divorce may alter the results in your dissolution.

Please note that this legal advice does not establish a family law attorney-client relationship. This is a legal advertisement for Treviño Law, Inc.

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