Business Valuations for Disputes
An independent valuation gives the parties to a shareholder, partnership, family law property or commercial matter a reasoned value to work from.
Why an independent valuation
In a dispute about a business, the first disagreement is usually about value. Each side has a number, usually reached by different assumptions, and negotiation stalls until those assumptions are tested. An independent valuation sets out one reasoned view, the evidence behind it and the assumptions it depends on.
Disputes take different forms. Shareholders or partners in a falling out need a price for a buy-out or an exit. A separating couple needs the value of a business interest as part of a property division. Parties to a commercial matter, such as a failed sale or a contested agreement, may need to understand what a business was worth at a particular date. The question being asked changes what the valuation has to do, so the scope has to be settled first.
A valuation prepared for negotiation, mediation or settlement discussions is not the same as a report prepared for a court. Where a report is to be used as expert evidence, the engagement, the instructions and the expert’s duties are different, and the work is scoped and priced separately. We settle this at the start so nobody is surprised later.
When owners and advisers ask for one
- Two shareholders of a plumbing, building or civil contracting company who disagree about the value of one shareholder’s shares
- A partnership where one partner is leaving and the parties cannot agree on the price of the departing interest
- A separating couple where one spouse owns or holds an interest in a trade business and its value is needed for the property settlement
- A disagreement within a family about the value of a family business, between those who work in it and those who do not
- A commercial dispute about a failed business sale or purchase where the parties disagree about what the business was worth
- A disagreement with a former partner or director about the value of the interest paid out on exit
- A buy-sell clause has been triggered and the parties dispute the price
- Parties heading to mediation who want a neutral value to anchor the discussion
What the valuation needs to address
Settled in the engagement letter before work starts, so the report answers the question it is being used for.
The question being asked
We settle first what the valuation is for: a negotiated price, a settlement figure, a property division or a report that might later be used in proceedings. The scope, the information we need and the level of formality all follow from that.
Valuation date
Disputes often turn on a date, such as the date of separation, the date of departure or the date a deal fell through. We value as at the date the parties or their lawyers identify and state it clearly. An additional historical valuation date is from $495 + GST where the engagement permits it.
Standard of value and discounts
Market value is the usual standard, but the governing documents, the legal framework your lawyers identify or an agreement between the parties may call for something else. We state the standard used, and for a minority or controlling interest we say whether any discount or premium applies and why.
Information and access
In a dispute, one side usually holds the records. We say what information we have relied on, what we asked for and did not receive, and what we have assumed in its absence, so a reader can judge how far to rely on the conclusion.
Independence and reliance
We act as an independent valuer with no interest in the outcome, and we state who the report is prepared for. Where one party commissions the report, the engagement records that, and the report does not take that party’s side.
Entities, loans and related parties
Disputes often involve several entities, loans between owners and related-party transactions. We identify exactly what is being valued and treat related-party items at market terms where the evidence allows.
How it runs
We start by confirming in writing the type of matter, the entity and interest, the valuation date and who will receive and rely on the report. If lawyers are involved, we take instructions through them where they ask us to. Intake starts online at /start.
A valuation for negotiation, mediation or settlement discussions runs like any other: documents are uploaded through the secure client portal, a draft report is provided before the report is finalised, and the fee is fixed. Disputes are complex valuations, quoted in writing from $2,995 + GST before work starts. See pricing.
If a report may be used as expert evidence in court or other proceedings, tell us at the outset. That is a separate engagement, with different instructions and duties for the expert, scoped and priced separately, and it is not the standard valuation described on this page.
- Tell us about the business. Complete a short valuation intake.
- Upload your information. Financial statements and supporting information are securely uploaded through the client portal.
- We analyse the business. We review earnings, operating structure, industry characteristics, risks, assets and transferable goodwill.
- Valuation prepared. Appropriate valuation methodologies are applied and the evidence is documented.
- Draft and final report. You receive a draft before the report is finalised.
Important
We do not give legal advice. Where a report is to be used as expert evidence in court, the engagement, instructions and expert duties are different and are scoped and priced separately, and we do not say that any court or tribunal will accept a report.
Information on this website is general in nature and does not constitute legal, taxation or financial advice. The appropriate valuation approach depends on the circumstances and purpose of each engagement.
Common questions
Can you value a business for a property settlement after separation?
Yes. We can value a trade business or an interest in it as at a date your lawyers identify. It is a complex valuation, quoted from $2,995 + GST, and the scope, the date and who will rely on the report are agreed in writing first. We do not give legal advice on how the value is used in the settlement.
Is your valuation report expert evidence?
Not by default. A valuation for negotiation, mediation or settlement discussions is a different engagement from a report prepared as expert evidence. If you may need the second, tell us at the start, because the instructions and the expert’s duties are different and the work is scoped and priced separately.
Will a court or tribunal accept your valuation?
We cannot promise that any court, tribunal or other party will accept a valuation, and we do not suggest otherwise. We state the date, the standard of value, the information relied on and the reasoning in full, so that others can test it.
What if the other side will not provide documents?
We value on the information we have and say clearly what is missing and what we have assumed. The conclusion may then be less certain, and your lawyers can advise on how to obtain the records. We have no power to require anyone to produce documents.
Related
Start with a short intake. We confirm the fee and scope in writing.
An Independent Business Valuation is $1,995 + GST, with a draft before the report is finalised. Typical turnaround is 3 to 7 business days once all required information has been received.