Archive 2023-183: Complexities and Challenges of Business Valuation in Litigation

Speakers:Carl Saba, MBA, CVA, ASA, ABV and Matthew Lombardi, CPA/CFF

Business valuation conducted in the context of litigation differs from that prepared for other purposes such as tax or financial reporting, and acquisitions. Business valuations prepared in this context can be applied as a measure of lost profits, to determine a buyout price or equivalent award in shareholder disputes, or as a measure of unjust enrichment.  This presentation will address several of the significant complexities and challenges that financial experts experience when conducting business valuation in litigation.

Learning Objectives:

In this webinar, participants will learn how to address the following challenges posed by business valuation in litigation:

• Determining the appropriate standard of value
• Valuing unestablished businesses, where the past is not a good predictor of the future
• Dealing with the lack of access to contemporaneous discussion with management
• Preparing a valuation several years after the valuation date, when material subsequent events have occurred
• Ex-post ex-ante considerations specific to business valuation used as a measure of damages
• Taxation considerations when estimating business value as a measure of damages – how to make plaintiff whole while avoiding a windfall
• Properly accounting for risk
• Reasonable normalization adjustments in litigation

Handouts