We have worked with many clients and their attorneys over the years in support of ongoing litigation where the value of a small business and its underlying machinery & equipment is at issue with either a divorce case or an insurance claim. We have seen several situations drag out indefinitely at significant expense to the parties involved, ultimately leading to a court or arbitration hearing. The final judgment is ultimately left in the hands of a judge or arbiter who must pore through a significant amount of testimony and documents before rendering a final opinion that may or may not be favorable to those with a stake in the decision.
In rare instances, innovative ideas have been put forth by the opposing legal teams along with the judges or arbiters to create a more efficient and effective process toward settling on value issues as well as other components in a dispute. If both sides have engaged with independent valuation experts or other outside consultants who have no bias in the matter, they look to utilize them more directly and collaboratively during the pre-trial phase. The idea is for the experts to work together and come to a reasonable agreement on value, which avoids the need to carry these issues into the testimony component of the hearing or trial.
From our experience with this type of process, it has proven to be successful largely as long as the experts respect each other’s backgrounds and opinions while keeping an open mind when negotiating an agreed-upon value for their clients. The only times we have seen this alternative effort falter is when one of the independent consultants digs their heels in with only their specific interests in mind, irrespective of the other expert opinions, ultimately refusing to assist in the process reasonably.
There will always be cases where the parties are so far apart, and there are very high stakes involved that this process may not apply. However, many small business disputes involve disparities that are not that significant.
The big-picture goal of any professional consultant involved with a business or personal dispute is to be part of a team that aims to facilitate a fair settlement that hopefully works out for all parties involved. It’s improper for a professional accredited appraiser to focus their effort solely as an advocate for a particular side of the dispute. If they do, then their independence and unbiased opinions no longer apply. It’s fine if the valuation expert advocates for their work product and the conclusion of value they support. However, those opinions will always have a degree of subjectivity to them. It is incumbent on them to realize that different experts with varying experiences and points of view should be able to find common ground to help all parties involved with litigation dispute work.