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When done well, valuation disputes are among the most interesting and rewarding cases to litigate. But on the other hand, few things are more frustrating to a court than two obviously "hired-gun" experts both peddling grossly unrealistic valuations.
A recent decision from New York County, Levine v Platzer, Swergold, Levine, Goldberg, Katz & Jaslow LLP et al, No. 652616/2021 (New York County Oct. 17, 2025), shows both ends of the spectrum. Following a four-day valuation trial, New York County Commercial Division Justice Schecter treats us to a thorough analysis that provides several lessons—or perhaps more importantly, citable footholds for future argument—for lawyers and business appraisers alike.
The Law Firm Dissolution
In 1991, Scott Levine joined the partnership of Platzer, Swergold, Levine, Goldberg, Katz & Jaslow LLP, a general service law firm (the "Firm"). The Firm operated as a limited liability partnership, subject to New York's archaic Partnership Law and without any written partnership agreement.
The absence of a partnership agreement meant that any Partner was free to dissolve the Firm pursuant to Partnership Law 63 (for the basics on Section 63 and law firm dissolution, see this post: Disputes Abound when Law Firms Dissolve).
By 2020, Levine had been managing partner of the Firm for several years. The Firm obtained a consulting report that was—according to the other partners—critical of Levine's performance in that capacity. Rather than address the issues raised in the report, explained his partners, Levine announced his intention to retire.
The Firm and Levine spent months negotiating a separation agreement (as the Firm had historically done with other retiring partners), but they were unable to come to a resolution. When negotiations broke down in March 2021, Levine elected to dissolve the Firm.
The Firm Continues Doing Business
Under New York Law, dissolution of the partnership may not be the end of the road for the Firm. Partners of a law firm that dissolved due to the death or resignation of a partner may elect under Section 73 of the Partnership Law to carry on the business of the dissolved partnership, provided that the deceased or retired partner is paid the value of her interest as of the date of dissolution (Cohen v Akabas & Cohen, 79 AD3d 460, 462 [1st Dept 2010]).
That's exactly what the remaining partners of the (now dissolved) Firm did. They formed Platzer, Swergold, Goldberg, Katz & Jaslow, LLP (the "New Firm"), changed the letterhead, assumed the lease, and continued the Firm's business.
This meant that the Firm needed to pay Levine the fair market value of his ownership interest as of the date of dissolution, on which the parties sharply disagreed.
The Valuation Trial
The disagreement about the extent and value of Levine's ownership interest in the Firm required years of discovery, expert reports, and a four-day bench trial before New York County Commercial Division Justice Schecter in March of 2025.
With Levine's right to a fair market value payment fixed by statute, the trial was mostly a battle-of-the experts: two reputable business appraisers, with alphabet-soup credentials and designations, reaching wildly different conclusions as to the value the Firm as of the date of dissolution.
Levine's expert found that his roughly 40% interest in the Firm as of the dissolution date was $2.9 million, plus his roughly $400,000 capital account balance. The Firm's expert found that the value of Levine's 25% interest (more on that later) was $0.
For those that enjoy valuation disputes, Justice Schecter's post -trial decision is a must-read. In her inimitable, pragmatic style, she finds that the difference in value stems from only a handful of disagreements on certain balance sheet items, then makes well-reasoned determinations on each of those items. No surprise; she did the same in this good one from 2023.
A Credibility Rebuke
An argument that overreaches undermines itself. That's a straightforward truth that all litigators learn at one time or another. If you can't concede on even one thing, you can't be believed about anything. Motivated by the too-aggressive positions of both experts, Justice Schecter opens her decision with a cutting reminder of that fundamental precept:
While both experts are qualified, they each took overly aggressive positions on certain issues that conflicted with the credible evidence. In fact, ultimately the parties' critiques of each other's experts were more compelling than their defense of their own experts' methodologies. The truth, as is often the case with dueling hired-gun valuation experts, is somewhere in the middle."
Ouch.
The Big-Ticket Valuation Disputes
In ticking through each of the major areas of dispute, the Court offers helpful guidance on many of the questions that often feature prominently in valuation disputes, especially in law firms.
40% or 25% Partner: the K-1s Control
The remaining partners contended that because the Firm did not have a written partnership agreement, the default rules that partners "share equally in the profits and surplus" (Partnership Law 40) apply. As one of four equity partners, Levine therefore held an equal 25% interest as of dissolution.
Levine countered that he had a 40.362% interest in the Firm, based on his Schedule K-1s (often critical evidence in ownership disputes) which provide that his "distributive share" was 40.362%.
The Court found in Levine's favor: the Firm's K-1's, together with its historical practice of buying out retiring partners based on the ownership percentages expressed in the K-1s was sufficient evidence of an intent to deviate from the default rules of coequal ownership.
Contingency-Fee Cases
A law firm's interests in ongoing contingency fee cases are among the most difficult assets to value.
Levine's expert valued the firm's contingency/flat fee cases at more than $2 million. He first determined that historically, contingency/flat fee cases accounted for about 17% of the Firm's annual revenue for 2018 and 2019—years having the most data. He used that average to conclude that between 2016 and 2020, the Firm collected approximately $1.4 million annually. He then concluded that as of the date of dissolution, the Firm had approximately 1.5 years' worth of contingency/flat fee matters outstanding.
The Firm's expert, by contrast, assigned a $0 value to the Firm's interest in any outstanding contingency-fee cases. Any such exercise, argued the expert, would require layers of assumptions and speculation.
The Court found both methodologies wanting, but it ultimately gave the victory to Levine by default. Levine's backward-looking analysis, said the Court, was "not on its own enough to determine value." But it was enough to completely shut down the Firm's argument that the contingency-fee cases were worth $0: "it is probative evidence that defendants failing to assign any value to what was unquestionably a significant part of the [Firm's] business is untenable and would result in a valuation not rooted in reality."
Accounts Receivable
Levine's expert valued the Firm's then-existing accounts receivable on an individualized basis: he interviewed Levine about each outstanding receivable, then assigned an "estimated collectability percentage" to each account. This resulted in an AR balance, argued Levine, of $3.5 million.
The Firm's expert, by contrast, used the Firm's historical realization rate to conclude that the value of its AR was $1.5 million. Unpersuaded by either approach, the Court sided mostly with the Firm due to the Court's concerns about the credibility of Plaintiff's expert and the "complete lack of weight afforded to plaintiff's valuation."
The Lease
The dispute with the potential to produce the largest swing in value concerned the Firm's lease.
The Firm's expert determined that at the time of dissolution, the lease was a $2.6 million liability of the Firm—the Firm was obligated to make payments on the lease through its conclusion.
Levine's expert, by contrast, wrote off the entire liability of the lease because—shortly after dissolution—it was assigned to the successor firm.
Curiously, neither side saw fit to perform any analysis seeking to determine whether the lease was valuable. How did the property/lease obligations stack up to comparables in the area? What were the Firm's rights regarding surrender/sublease?
Instead, the parties' conflicting positions led to a dispute about whether as of the date of dissolution, it was "known or knowable" that the new firm would assume the Firm's lease obligations. If it was, then Levine was right to write off the lease. If it wasn't, then a 100% write off might not have been appropriate. On that question, the Court sided with Levine, finding ample evidence suggesting that—as of the date of dissolution—it was known or knowable that the firm's lease would be assumed by those partners who continued the practice of the Firm.
After resolving the issues in dispute, the Court directed the parties to submit an order with a revised calculation, drawing to an end a five-year saga over the law firm that broke bad.
Beware the $0 Valuation
Litigators and valuation professionals will have no trouble spotting a handful of notable takeaways from the Court's analysis; I'll emphasize one. Following Justice Schecter's 2023 decision in Rosenthal v Erber, I cautioned against a $0 valuation. Even if the math technically supports one, a $0 valuation is conceptually tough to square with a going concern that employs the partners/members. In Levine, the Firm came in at a $0 valuation, which only hurt its credibility: "defendants' arguments that the Old Firm had no value whatsoever . . . are rejected. These contentions significantly undercut defendants' expert's credibility." Beware the $0 valuation.
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