For the division of property and assets in a divorce proceeding, gross receipts are an insufficient basis for the valuation of a corporation. In a recent case styled Mansour v. Mansour, the Florida Court of Appeals stated that: “At the hearing on the contempt motion, all agreed that Mr. Mansour did not receive proper notice. Nevertheless, the trial court proceeded and found Mr. Mansour in indirect civil contempt. It also set a purge amount without imposing a coercive sanction that the purge would remove. The trial court ordered Mr. Mansour to pay $25,000 within four weeks. It made no finding as to notice, either orally or in the written order, as rule 12.615(c) requires.
This was error. The trial court also erred in requiring Mr. Mansour to pay a purge amount without a sufficient evidentiary basis to demonstrate his ability to comply. Mr. Mansour owned a roughly thirty-three percent interest in Park Edge Enterprises.The entity’s 2010 receipts were under five million dollars. Over Mr. Mansour’s objection, the trial court appears to have valued Mr. Mansour’s interest in the entity based on gross receipts…Gross receipts, however, are an insufficient basis for valuation; the trial court must determine the value of corporate stock. See Buchanan v. Buchanan, 932 So. 2d 270, 270-71 (Fla. 2d DCA 2005) (reversing contempt order for lack of competent, substantial evidence of ability to pay where corporate tax return was only evidence of value of corporation). “The trial court is bound by the general master’s factual findings unless they are not supported by competent, substantial evidence or are clearly erroneous…The record before us does not contain competent evidence to support the general master’s valuation of the business.”
To speak with a family law attorney in Wellington, FL, contact Matthew Lane & Associates, P.A. at (561) 651-7273