Listen to a podcast with business appraiser Tony Cotrupe (Melioria Advisors), who tells the story of getting in the middle of two battling brothers who co-own the family business. Each brother wants the other one out the door, so the challenge is to come up with a value of the company both sides can live with and avoid long and ugly litigation. Cotrupe tells his fascinating tale to Peter Mahler, a business divorce attorney with Farrell Fritz in New York City.
Mahler has done a whole series of podcasts on business divorce, many of which include valuation issues, and he also has an excellent blog. Check them out!
Practice op: One way to help clients through potential trouble such as this is with advice on exit planning. This includes how value is determined in the buy-sell agreement, which is often very vague or nonexistent. A common recommendation is for an outside expert to perform a valuation upon some triggering event. One that is not so common is to use a predetermined fixed price that is periodically reviewed and adjusted.
BVR just conducted a webinar on this matter, Business Prenups, Relationship Counseling, and Corporate Divorce: Business Lifecycles and Their Impact on Valuation. The presenters were valuation expert Mark Zyla (Acuitas Inc.) and attorney William Piercy (Berman Fink VanHorn).
Please let us know
if you have any comments about this article or enhancements you would like to see.