A Two-Part Valuation: Initial Estate Settlement and Probate Lawsuit

Situation #1

The owner of a seafood restaurant located on the coast of Massachusetts passed away. Lou Pereira of Merrimack Business Appraisers was hired by the estate’s attorney to prepare a valuation of the restaurant as 50% was left to the owner’s son from his first marriage and 50% to his second wife.

Merrimack Business Appraisers’ Approach #1

Lou Pereira prepared a thorough and detailed valuation of the restaurant including photographs. The valuation accounted for the restaurant having sustained significant damage due to coastal storms, the negative impact of deferred maintenance on the building, and the adverse effect on valuation of its debt.

Valuation Outcome #1

Based on the detailed valuation report prepared, the estate was settled and the spouse of the deceased bought out the son’s interest in the business.

Situation #2

For many years, the spouse of the deceased, now the restaurant owner, invested in the property, repairing the damages, fixing and improving it and paying off the debt. She sold the business five years later.

The sale resulted in the son’s mother filing a lawsuit claiming her son had been cheated. The business owner who had bought out the son years before, hired Lou Pereira of Merrimack Business Appraisers to review the valuation of the business at the time she sold and to present his findings by testifying in probate court.

Merrimack Business Appraisers’ Approach #2

The initial detailed business valuation from years prior served as the basis for Lou Pereira’s analysis and testimony. The initial valuation thoroughly validated the valuation of the restaurant at the time of settling the estate. Pereira leveraged this initial valuation to then document the value of the investments and improvements that had since been made to the business, testifying that the valuation at the time of sale was a legitimate valuation. 

Valuation Outcome #2

The court agreed to Lou Pereira’s presentation and explanation that the owner’s investments, improvements, and elimination of debt justified the business valuation at the time of sale and confirmed that there was not a case for the son having been cheated.