Bosserman v. Bosserman
In Bosserman v. Bosserman, 9 Va. App. 1, 384 S.E.2d 104 (1989), the wife asked the court to value the husband's interest in a family-owned, closely-held corporation.
A restrictive agreement required a shareholder to offer the stock first to the corporation at "true book value." The husband argued that the restriction defined the value. See 9 Va. App. at 3, 384 S.E.2d at 106.
The Court recognized that the value set by such agreements "is often artificial and does not always reflect true value," even though the agreements may be binding on business partners. Id. at 6, 384 S.E.2d at 108. "The sale price set by restrictive provisions on transfer is not conclusive as to the value of the stock." Id. at 7, 384 S.E.2d at 108.
A restriction on transfer does not control its value, "but the restriction on transfer is a factor which affects the value of the stock for purposes of equitable distribution." Id.
Interestingly, Bosserman relied upon an article discussing goodwill valuation in law firms to conclude restrictive provisions are not conclusive of value.
The Court defined "value" for equitable distribution purposes; it set intrinsic value as the standard of value. "Trial courts valuing marital property for the purpose of making a monetary award must determine from the evidence that value which represents the property's intrinsic worth to the parties . . . ." Id. at 6, 384 S.E.2d at 107.
The value of an item of marital property is its intrinsic worth to the parties: the worth to the husband and wife, the parties; the value to the marital partnership that the court is dissolving.