Divorce: Choose your valuation professional wisely

Situation

As part of settling a divorce, a business valuation was needed for a physician’s practice. Each party hired a professional to value the practice, one hiring a CPA and the other party hiring Lou Pereira, CBA, ASA, CVA, from Merrimack Business Appraisers.

Merrimack Business Appraisers’ Approach

  • Lou Pereira prepared a thorough and detailed valuation of the physician’s practice.
  • The detailed valuation report, exceeding one hundred pages, was prepared to present, if necessary, in court to support the division of assets as part of the divorce settlement.
  • The CPA for the other party prepared a four page letter valuing the practice between $50,000 and $100,000.

Valuation Outcome

In court, the report prepared by the CPA was not accepted as evidence. The valuation prepared by Merrimack Business Appraisers at a value of $495,000 was admitted into evidence with Lou Pereira testifying to the valuation. The judge advised the parties not to waste the court’s time, but to settle the matter outside of court based on the accepted evidence of the valuation prepared and presented by Lou Pereira.

Divorce, Marital Asset Settlement

Situation

The owner of a $3.7 million technology company was going through divorce proceedings. As an expert with decades of experience in business valuations, Merrimack Business Appraisers President Lou Pereira was retained as the certified business appraiser to determine the fair value to the holder of the business and related marital assets.

Merrimack Business Appraisers’ Approach

Pereira’s business valuation report documented that the owner had started the business before the marriage, and substantiated that the value of the business had increased only marginally during the time of the marriage. The assignment included two valuations: business valuation at the start of the marriage and company valuation at the end of the marriage. The two values allowed the family court to identify the change in value of the business during the time of the marriage, which was the business value attributable as a marital asset.

Valuation Outcome

The result of the business valuation report was that both parties received an accurate allocation as part of the divorce settlement.

The Value of Personal Goodwill in a Divorce Settlement

Situation

The owner of a $1.8 million professional services business was going through divorce proceedings and sought to retain an expert to determine the fair market value of the business and related marital asset. With an impeccable track record of providing complete, highly detailed, and fully defensible valuations, Merrimack Business Appraisers was retained by the owner for business valuation services.

Merrimack Business Appraisers’ Approach

Lou Pereira, Merrimack’s president, developed a detailed business valuation report that identified and substantiated that $1 million of the business value was attributable to personal goodwill of the managing owner, and not a marital asset. Pereira applied a multi-variable analysis that qualified and quantified the amount of personal goodwill.

Valuation Outcome

As a result of Merrimack’s business valuation, the business owner saved approximately $500,000 in unjustified allocation in the divorce settlement.