The AriZona Entities market beverages (principally ready-to-drink iced teas, lemonade-tea blends, and assorted fruit juices) under the AriZona Iced Tea and other brand names. Other experts worked on behalf of Vultaggio, but their opinions received little treatment in the Court’s decision. Pratt testified on the topic of the discount for lack of marketability but did not offer an independent valuation opinion. Ruback ( Harvard Business School and Charles River Associates), who was the primary valuation expert, and Dr. Finally, Bellas testified regarding the revenue forecast he developed for AriZona and that was employed by Mercer in the discounted cash flow method.Įxpert witnesses for Vultaggio included Professor Richard S. Stradling, an investment banker, also testified regarding the value of AriZona. Imburgia testified on developing adjusted earnings for AriZona. Mercer was the primary business valuation expert. David Tabak ( NERA Economic Consulting), Christopher Stradling ( Lincoln International), and Michael Bellas ( Beverage Marketing Corporation). Christopher Mercer ( Mercer Capital), Basil Imburgia ( FTI Consulting), Dr. Similarly, the group of defendants, led by Dominick Vultaggio, is referred to as “Vultaggio.”Įxpert witnesses for Ferolito included Z.The group of plaintiffs, led by John Ferolito, is referred to as “Ferolito” herein.For purposes of this discussion, we simplify the naming of the “sides” in the litigation, following the Court’s convention. The case citation in the footnote below provides the names for all plaintiffs and defendants in the matter. The Court’s decision focused on the first valuation date, or October 5, 2010, and we will do the same in this analysis of the case. The first date, October 5, 2010, pertained to a portion of the 50% block, and the remainder of the block was to be valued as of January 31, 2010. The Court had to determine the fair value, under New York law, of a combined 50% interest in the AriZona Entities as of two valuation dates. The overall litigation had numerous complexities however, the valuation and related issues were ultimately fairly straightforward. However, in an informal article of this type, I will not cite specific pages for simplicity and ease of reading. There are numerous quotes from the Court’s decision in Ferolito v. The parties recently closed a private settlement of the matter, so there will be no appeal. 2 I was asked not to publish anything while the matter was still pending. I have not previously written about the AriZona matter because I was a business valuation expert witness on behalf of one side. The Court’s decision in what I will refer to as “the AriZona matter” (or “the matter”) was filed on October 14, 2014. The trial lasted from until July 2, 2014. The trial was held in the Supreme Court, State of New York, Nassau County, New York, the Hon. New York’s Largest Corporate Dissolution Case: AriZona Iced TeaĪfter several years of litigation involving a number of hearings and trials on various issues, a trial to conclude the collective fair value of a group of related companies known as the AriZona Entities (also referred to as “AriZona” or “the Company”), occurred.
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