Last week’s item on the future of valuation litigation (the article in The Business Lawyer crediting market evidence over theoretical valuation models) “grabbed my attention,” writes Ed Davis, CPA/CVA. “I am a ‘broker who also does valuations,’” primarily for the buy side of the private business community with gross revenues between $1 million and $35 million, he says, “the typical family business.” Davis usually prepares a market estimate and then does “the research and the math just to establish a reasonable range of expected offers to present/review with our sellers.” He adds:
I've had the benefit of working with very credible associates who have been in the transaction market for 30+ years. I must admit, when I sit and talk with my valuation associates—all smart, hard-working people—I find my transaction world is very different than their world (valuations only, no transactions). We're learning to live with each other—but it is different.
Does his world make a difference with judges? When Davis and his transaction associates are engaged for expert witness work, “the judges, knowing our backgrounds, really seem to listen to what we say (good or bad).” Indeed, in a recent case, a judge told one of Davis’s colleagues, “This person has been doing deals for over 30 years: I'm very interested in what he has to say.”
“Kind of entertaining, really,” Davis comments. Or is it? Email your thoughts on the future of BV in litigation to the editor.
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