THE CHALLENGE

This individual, referred to us by her attorney, was going through a divorce. Her husband owned a 50 percent interest in a retail business. The husband's interest was valued at $158,000 by the husband's expert. The wife's lawyer needed to know if this was a fair valuation and, if not, what a fair value would be for the business in question. As Certified Valuation Analysts, Leask & Leask was called in to render an expert opinion of value.

THE SOLUTION

Based on our review of the appraisal report provided by the husband's expert, we were convinced the husband's interest in this closely-held business had been undervalued. Leask & Leask was engaged to prepare our own appraisal report.

A review of the depositions, an on-site visit to the retail business, and use of information provided to us by the husband and his accountant in reply to our questions, gave us the background material we needed.

By employing appropriate valuation theory and techniques that fit this particular fact pattern, the husband's 50% interest was valued at $324,000.  The report thoroughly documented the rationale for arriving at that estimate in the written appraisal report.

The court was given the task of making the final determination of the business' true value. After reviewing both reports and hearing the testimony of both experts, the judge determined the value of the husband's business interest to be $300,000, a value far closer to the results set in the Leask & Leask appraisal report.

BENEFITS

ü       Helped the wife and her lawyer to understand the strengths and weaknesses of the husband's valuation report as provided by his expert.

ü       Convincingly demonstrated that $158,000, the value selected by the husband's valuation expert, was far too low.

ü       Developed an appraisal report to justify a value of $324,000 for the husband's business interest and testified in court in support of this opinion.

ü       The higher value ($300,000) assigned to the business by the court helped the wife get a more substantial divorce settlement.