Why a marketed CIM is the wrong courtroom instrument
A CIM exists to invite competition. IBBA Pulse Q1 2026: 83% of deals over $5 million drew three or more offers (Source: IBBA). That is price discovery. A court, an estate tax return, or a buy-sell that says “appraiser” wants a defined standard, a credential, and a report the user can rely on. Those jobs do not share a cover page.
Appraisal versus broker opinion is the boundary. This page is the assignment list. Family succession versus outside sale and selling to management are the related process pages when the family still wants a transaction.
BizBuySell’s 2.75x SDE median and GF Data’s 7.2x EBITDA average remain useful as climate — in the correct size band — so the parties understand what a marketed sale might have discovered. They are not the estate number. They are not the divorce number.
What standards of value appear in these files?
Fair market value is the classic willing-buyer, willing-seller construct, often with minority and marketability discounts the agreement or the court may or may not allow. Fair value in a dissenting-shareholder or divorce statute may forbid those discounts. Investment value is value to a particular buyer — a strategic, a partner who already owns 50%, a family that will not sell to outsiders.
The document names the standard. Counsel and the appraiser apply it. A website table cannot. The calculator is educational. Printing it on letterhead does not make it an appraisal.
Size band still matters inside any standard. A sde-under-1m CNC shop at 2.0x–3.6x SDE and a ebitda-3-10m medical molder at 6.5x–9.0x are different files. An appraiser who blends them is making the same mistake a sloppy CIM makes. SDE versus EBITDA still applies.
How do buy-sell agreements name the appraiser?
They name a credential, a process (one appraiser or a panel), a standard of value, and sometimes a date. Follow the paper. If the paper is silent, counsel amends it or the court fills the gap. Do not fill the gap with a broker opinion because it is faster.
Funding the buyout is a separate problem. SBA 7(a) still caps at $5 million (Source: SBA). A partner note, life insurance, or cash at close may or may not fit. Structure is not a standard of value. Stanford’s 6.2x search median (Source: Stanford GSB) is a marketed-buyer fact. It is not a buy-sell definition.
| Assignment | Usual professional | Usual failure mode |
|---|---|---|
| Partner buy-sell | Appraiser named in the agreement | Using a CIM as the number |
| Estate / gift tax | Counsel + CPA + appraiser | Using peak-year SDE as FMV |
| Divorce | Counsel + appraiser under the statute | Mixing investment value with FMV |
| Quiet marketed sale later | Broker opinion first | Stretching the teaser backward into the court file |
| MBO funded by lender | Appraisal / QoE as the lender requires | Assuming a family handshake satisfies the credit |
What can a broker still do?
Explain the marketed alternative so the partners know what they are walking away from. Flag when OLV of the iron already beats a going-concern story. Refuse to be named as the appraiser. Send M&E, real estate, and environmental work to licensed people. About Jason Taken is the role page. Illinois business-broker regulation (Source: ILSOS) is not an appraisal license.
If the partners decide to sell the plant instead of buying each other out, the file can move to sell my manufacturing business. Sequence it. Do not run a public process in the middle of a divorce without counsel.
When should counsel stop the marketed process?
When a statute, a judge, or a buy-sell forbids it. When confidentiality in the family case would be breached by a teaser. When the only number that matters is a standard the market will not use. HedgeStone will stop. The valuation pillar is a teaching essay, not an exhibit.
Book a confidential intro call if you need to know whether your assignment is a marketed sale, an appraisal, or both in sequence. Educational information only. Not legal, tax, or appraisal advice. No value is guaranteed.
How a marketed range and an appraisal can differ on the same plant
The marketed range assumes competition and a buyer set. Fair market value in an appraisal may assume a hypothetical buyer and apply discounts the market process would not. Fair value under a statute may forbid those discounts. Investment value to a remaining partner may be higher or lower than either. None of those gaps is a reason to accuse someone of bad faith. They are different questions.
An ebitda-1-3m plastics file at 4.5x–6.5x in a marketed CIM might appraise differently under a minority-interest instruction. Do not use the CIM to yell at the appraiser. Do not use the appraisal to yell at the market. Sequence the jobs.
What to bring if you think you might sell after the dispute
Counsel’s permission. A confidentiality plan that does not leak the family matter into a teaser. A recast that does not assume the fighting partner still quotes. A machine list that does not assume the fighting partner still maintains the iron. Family versus outside sale is the process cousin when the family still has a choice.
If the buy-sell forces a sale to the remaining partner at a formula, the formula wins until counsel says otherwise. This website is not the formula.
Estate files and the peak-year temptation
Executors like the best year. Buyers and the Service do not share that preference. Use a defined date, a defined standard, and an appraiser. Peak-year SDE on a shop that later lost a whale is how estate files become litigation files. Distressed logic can apply after death if the book already died. Do not hide that from the appraiser.
Jason Taken can explain what a marketed process would have looked like. He cannot sign the estate return.
How a marketed range and an appraisal can differ without anyone being dishonest
Competition versus a hypothetical buyer. Discounts a statute may forbid. Investment value to a remaining partner. Those gaps are different questions. An ebitda-1-3m plastics file at 4.5x to 6.5x in a CIM might appraise differently under a minority instruction. Do not use the CIM to yell at the appraiser. Do not use the appraisal to yell at the market. If a buy-sell forces a formula, the formula wins until counsel says otherwise. Executors who use peak-year SDE after a whale left create litigation files. Jason Taken can explain the marketed alternative. He cannot sign the estate return.
A document-first call that keeps a teaser out of a courtroom
Bring the buy-sell, the statute, or the judge’s instruction if you have it. Bring tax returns. Bring counsel’s permission if a marketed process is even allowed. The useful output is which professional you need this month. A printed website table is not that professional. Fair market value, fair value, and investment value remain different words. Peak-year SDE after a whale left remains a litigation seed. Jason Taken can explain the marketed alternative. He cannot sign the return or the decree. If the formula in the agreement governs, the formula governs until counsel says otherwise.
A closer read on document first
Bring the buy-sell, the statute, or the instruction if you have it. Bring tax returns. Bring counsel’s permission if a teaser is even allowed. Twenty minutes should sort marketed range versus appraisal versus both in sequence. A printed website table is not an exhibit. Fair market value, fair value, and investment value are not synonyms. Peak-year SDE after a whale left is how estate files become litigation files. If the agreement names a formula, the formula wins until counsel says otherwise. Jason Taken can explain the marketed alternative. He cannot sign the return or the decree. Mixing those jobs is how people get angry at the wrong professional.
What a buy-sell formula does that a website table cannot
A buy-sell that says “fair market value as a going concern, determined by a credentialed appraiser within ninety days” is a process instruction. A printed size-band table from this site is not that instruction. Counsel and the named credential do the work the agreement already described. Jason Taken can explain how a marketed process would have priced the same plant for a third-party buyer. He cannot replace the formula, the statute, or the court order.
Fair value in a dissenting-shareholder statute is not the same sentence as fair market value. Investment value to a synergistic neighbor is a third sentence. Mixing those three on a one-page exhibit is how estate and divorce files become two-year fights. If the agreement is silent, the first job is to name the standard before anyone multiplies last year’s seller discretionary earnings.
Peak-year earnings after a whale customer left are a common estate exhibit and a poor one. Recast the last twelve months after the departure, then decide whether the remaining book even supports a going-concern method. If production has thinned to a skeleton crew, start at orderly liquidation of the iron and a working-capital write-down. That sequence lives on the distressed-manufacturer page. It also belongs in an estate memo when the facts match.
Illinois business-broker registration is not an appraisal license. A partner who wants a number for a K-1 or a decree should hire the person the return or the court will accept. A marketed range can sit next to that number if everyone agrees the plant might also go to market. Sequence those jobs. Do not staple a teaser to a motion.
Bring the operating agreement, the last three tax returns, and counsel’s written permission if a confidential teaser is even allowed. Twenty minutes should sort appraisal only, marketed process only, or appraisal first and market later. A calculator printout in the packet helps nobody.