Business Valuation Expertise
Equitable distribution in the event of a divorce tends to be a complex process, particularly for lengthy marriages where the parties have acquired many assets and debts throughout the marriage. This process becomes more complicated when the parties own commercial businesses. This is when business valuation expertise comes in. Carolyn J. Woodruff is a business valuator and a CPA, as well as a North Carolina Family Law Specialist.
On the Equitable Distribution Affidavit, the parties must provide a value for the business. This value has to be based on something, it cannot come out of thin air. Having some type of calculation or valuation behind the number that you contend accurately reflects the value of the business makes your position much stronger when it comes to negotiations and to judicial determinations in court.
After the parties have both provided their alleged value of the business on the ED affidavit, a determination has to be made regarding its value for the division of property to occur. The parties can agree on a value, negotiate a compromise of the value at mediation, or, if they cannot come to an agreement, the judge can determine which value is more appropriate. This is when the documentation supporting your contended value comes into play. If you value the business at $X, based on a business valuation done shortly before the date of separation, and your spouse values the business at $Y, with no basis, your position is stronger in negotiations and if it comes to a judicial determination of the value.
It is easier to provide a value for a publicly-held business, as the stock prices can be used to determine the value of the business. The trademark characteristics of a closely-held business makes the valuation process more difficult. A closely-held business is a business with a limited number of shareholders that is not publicly traded on a regular basis. This is a type of company where a member of the public cannot typically go out and purchase shares of the business. Therefore, there is no market value for the shares of a closely-held business, making the valuation process more complicated than for a publicly-held company.
If your equitable distribution involves one or more closely-held businesses, you may need a business valuation at fair market value for the date of separation, and perhaps for other dates. Carolyn J. Woodruff, JD, CPA, CVA has this expertise in business appraisal.
To our knowledge, Carolyn is the only North Carolina Family Law Board Certified Specialist who is both a CPA and a business appraiser. This makes her very qualified to handle these types of cases. Having knowledge about the underlying family legal issues in the case, as well as having the financial expertise to also assist with and understand appraisals of the business, is a competent combination of knowledge and skillset. When you are dealing with complicated issues, it is important to have an attorney at your side with the knowledge and expertise to best assist you.
Contact us today to set up an initial consultation for business valuation issues, or for any of the wide-ranging family legal services that we provide.