Who is working for who?

July 2, 2019

We recently performed a business valuation for an acrimonious split between directors who were also shareholders. An unfortunately common situation in business and one that is exacerbated in the absence of a shareholders' agreement.


The process of valuation is straightforward in most situations, although this one involved a business that did not enjoy a trading history but had lucrative contracts in place, with the leaver placing more emphasis on these than the remaining shareholders. No surprise there then.

This led the directors who remained as shareholders to ascertain how much they could get away with in order to wave goodbye to the leaver.


The only problem was that the original valuation report was addressed to the company as a whole i.e all the shareholders. Now the directors wanted an opinion on an adversarial basis, which is of course a conflict of interest for yours truly.


The lesson is that when you are in a sticky position and may even be forced into selling the entire business to settle a boardroom dispute, take time to consider exactly who the professionals are acting on behalf of.


As a footnote, I did suggest a mediation which would be over in a day and would cost a fraction of the cost of solicitors , which is where both sides were at. I could almost hear the sound of the lawyer's hands rubbing together as the fees ticked upwards as the dispute dragged on.

Share on Facebook
Share on Twitter
Please reload

Featured Posts

Still Wondering Why Prospective Customers Melt Away?

We’ve all experienced that warm tingle and inner glow when you put the phone down having arranged...

Disappearing Prospective Customers?

May 9, 2018

Please reload

Recent Posts

May 15, 2019

January 14, 2019

September 21, 2018

August 2, 2018

Please reload