Valuation in cases of conflict, mediation, arbitration, and lawsuits

When valuation occurs in the context of a business-related conflict, it is highly important that all parties involved are provided the opportunity to explain their points of view (adversarial and audi alterem partem).

Quite regularly the valuation of an enterprise is disputed among shareholders, for instance in the case of a (forced) buy-out of one of the shareholders. Then, the visions of the different parties about the economic value of the enterprise can significantly deviate from one another. This can be partially the result of business facts, emotions and conflicts of interest, each playing an important role. In these situations, the consultation of an independent external party – Whether it is binding or not – can offer a solution. When conducting a valuation of an enterprise in the context of dispute resolution procedure, a register valuator eminently is the specialist to offer independent consult. In such cases, the register valuator can serve as the party expert, but also as an independent expert. In some cases, this happens as a result of appointment by the court.

Shareholder conflict

Most frequently a valuation in the context of a dispute occurs when disputes between shareholders and owners of an enterprise take place. A frequent cause are conflicting interests concerning the financial or strategic policy of the enterprise. For instance, one of the shareholders could have the ambition to grow, with which another shareholder may not agree. If a conflict among entrepreneurs escalates to such an extent, that the continuation of the enterprise may be compromised, buying out one of the parties may be a solution. The value of the enterprise may be the main point of discussion in these cases.

Other business disputes

Besides situations of conflict between owners of enterprises, a conflict might also arise with other business partners. Examples of this include conflicts with the suppliers, clients and conflicts with family relatives (heritage or property settlement). In such cases a register valuator independently determines the value of an enterprise or claim in a business-related dispute, in order that parties can gather around the table to solve and unwind the dispute.

Approach to valuation in business conflicts

With a valuation in the context of a business dispute, it is common practice that both parties are provided the opportunity to explain their own point of view. This transparency guarantees that a complete and accurate overview of the enterprise and the dispute will be made.

Second opinion

Aside from this we can provide services to you with the assessment of a valuation or determination of a claim from another advisor, by means of a second opinion. In this case, it is common practice to test and question whether the assumptions are economically tenable and whether the methods of valuation are correctly applied. After the testing and assessment of the reporting, we will engage in a personal conversation in which our findings and recommendations will be explained.