Valuation disputes are a common problem for business partners, especially in divorce. Unfortunately, valuation conflicts are an inherent part of the process. A party that wants to continue owning and operating a business has an incentive to value the equity as low as possible. The other party has directly opposing incentives.

Yet, if one party offers a price that is too extreme, the other cannot respond as a typical investor might. For example, Jan is the majority owner of a business with Michael, who is exiting his ownership position. If Jan claims that the business is worth a fraction of its fair value, Michael often cannot offer to switch places and buyout Jan's interest at that valuation instead. Michael's primary recourse is to source another valuation opinion and push for a higher buyout offer from Jan.

Independent valuation experts and business appraisers do excellent work. Often, we rely on the work of these experts as we begin our process.

But, small changes to assumptions can produce large changes in valuation. In each valuation exercise, there are ways for the incentives of the client to manifest in the valuation opinion.

We believe that an outside investor's offer can help in valuation disputes. When we value an interest, we are prepared to back that opinion with capital.

There are always challenges in divorce with a business involved. We can help to find solutions that improve outcomes for all parties.