Business valuations often form the crux of a contentious dispute, including the following:
- shareholder and partnership disputes, where one party is seeing to buy-out the other, or in circumstances where a minority shareholder is claiming unfair prejudice;
- compulsory purchase order compensation claims, where the business affected has been extinguished;
- post-acquisition disputes, including breach of warranty claims; and
- contractual disputes, including commercial agency compensation claims.
The valuation of a business is an inexact science. The value will often depend on the anticipated future prospects, not only of the business involved but also of the industry in which it operates and the wider economy more generally. Those prospects cannot be predicted with certainty, and in order to present a reliable and robust assessment a valuer must demonstrate sound and commercial professional judgement.
Drawing on our forensic expertise and valuations experience, we are able to provide a commercial approach to business valuation. We are regularly instructed to provide a range of valuations for the business concerned, with an opinion as to where the value might most reasonably fall within that range. This advice, often provided at the pre-action stage, assists in formulating an efficient and proportionate litigation strategy.
At the other end of the spectrum, we are able to provide a comprehensive expert valuation report, acting on behalf of either one of the parties involved or as a single joint expert.
Recent cases include:
Acting on behalf of the accountants of a divorcing husband. On divorce, the husband failed to disclose his interest in two significant offshore trusts containing a sizeable shareholding in a major UK tool retailer. The wife successfully set aside the financial settlement when this omission later came to light, and the husband was ordered to make a considerable additional payment to her. The husband then sued his accountants for negligence. We were asked to evaluate the worth of the shares held by the trusts at various points in time relevant to the divorce process, relying on information that would then have been available.
Acting on behalf of a 50% owner-director of a glazing business who fell out, and subsequently excluded, the co-owner – who in turn initiated an unfair prejudice claim. We were asked to quantify the values of each parties’ interests in the business, at various dates and under a number of alternative scenarios driven by allegations made by the two directors (including diversion of trade, and inappropriate use of company funds). The matter settled following a mediation.
Acting as expert to quantify the claim of an agent following the termination of a contract to purchase uncut diamonds on behalf of its principal. The claim was brought under the Commercial Agents Regulations, although there was significant disagreement between the parties regarding the terms of the arrangement and scope of services provided. The agent acted on behalf of a number of principals, and a key issue was fairly allocating the agent’s costs between each of those. Following a hearing at the High Court at which we gave expert accounting evidence, the client was awarded substantial compensation.
Acting for a retailer who had a site within its property acquired under a CPO resulting in an extinguishment claim. Assessing the loss entailed benchmarking the performance of the acquired site against other stores within the retailer’s extensive store portfolio.