The valuation of business interests can be critical to resolving financial settlements on divorce.
We are well-versed in presenting expert evidence on business valuation issues to the parties, their advisers and the Court in a robust and readily understandable manner. Our valuation conclusions are supported by reference to the underlying financial metrics of the business and, where relevant, empirical data from comparator businesses or transactions. Our cost-efficient approach means we are equally capable of valuing small owner-managed businesses and international conglomerates.
As well as acting as a Single Joint Expert, where we act independently of the parties to the matrimonial dispute, we are often asked to act “shadow expert”. In this role, we provide various types of accounting advice, including seeking to identify hidden or understated assets, assistance drafting document requests and questionnaires, helping assess the robustness of the conclusions formed by other accounting experts and advising on questions to be put to those experts.
When acting as Single Joint Expert, and in addition to assessing the value of a business, we are frequently also instructed to address issues of liquidity, tax-efficient means to extract cash from a business, and the sustainable income that a business can generate going forward. We are able to advise on the CGT implications on the sale of a business or shares in that business. Where tax matters become more complicated we work closely with a specialist tax consultant with whom we have worked on many assignments previously.
Recent cases include:
Acting as single joint expert to assess the value and liquidity of a chain of children’s day nurseries based in the North of England. Issues were complicated by the differing accounting treatments applied between the management and statutory accounts of the various entities within the group. There were also a number of allegations made relating to personal expenditure passing through the accounts of the business. In order to arrive at our valuation, we identified and adjusted for this personal expenditure, and also took account of changes in the nursery sector more generally – including government-backed free child places, and the impact of minimum wage and pension obligations on the profitability of individual sites.
Acting as single joint expert to assess the value of a retail furniture business. The husband’s principal business ceased trading before the parties separated, albeit it re-emerged as two “phoenix” businesses under a different capital and shareholding structure. There were also allegations that the husband’s business associates was holding shares on his behalf.
Researching and cataloguing the assets of a property developer, who had hidden and disseminated assets over a number of years leading up to divorce. This exercise involved reviewing electronic records from the husband's computer, and the property assets were held across a number of jurisdictions.
Analysing the bank statements of a divorcing husband and wife, in order to determine the pattern of their respective expenditure over a period of time and assist in the assessment of “financial needs”.