May 23, 2024 •HoganTaylor
Business disputes, though every entrepreneur wished otherwise, are common. It might be the breakup of a longstanding partnership, a lawsuit over economic damages, or even a tax dispute. Regardless of the specifics, in the event your business finds itself the subject of a financial dispute, it’s crucial to have someone with the right financial expertise on the litigation team.
In any legal or financial dispute, it goes without saying that the services of an experienced attorney are needed. An attorney guides you through the litigation process, managing the strategy of your case. Along the way, they’ll bring in specialized professionals to serve as subject matter experts to help them, and potentially the judge or jury, understand the often complex technical issues at play. Among those professionals are often business valuation analysts: accredited professionals that issue a report, and in some instances testify, on the value of your business.
Depending on the circumstances of your case, retaining these professionals could be a vital part of your litigation strategy. They provide an objective assessment of the value of your business, making use of generally accepted valuation standards to quantify the value of an entire business, a portion of a business, or the lost profits or value as a result of some adverse event.
Many business owners understand little about this field until they find themselves in a financial dispute – at which point they need to learn as much as possible, as quickly as possible. In this overview, we outline all of the key points business owners need to know to understand the role business valuation specialists play in the litigation process for financial disputes.
HoganTaylor is an Arkansas and Oklahoma-based accounting and advisory firm. Our Forensic, Valuation, & Litigation Support practice works extensively with business owners and attorneys across the nation, providing a range of litigation support and expert witness services that bring clarity to stressful situations.
Scenarios Where Expert Litigation Services May Be Required
While most business owners hope to go through their careers without facing any litigation, many entrepreneurs will face legal challenges at some point in their journey. Various events can trigger these challenges. In all of these scenarios, entrepreneurs should retain a qualified attorney who can advise on the level of expert litigation services required.
At HoganTaylor, our litigation services professionals are often engaged in the scenarios outlined below.
Litigation Services for Shareholder or Partner Disputes
When shareholders or business partners find themselves in a dispute, the situation can often escalate to litigation.
Perhaps the relationship between two business partners has irreparably broken down, to the point where the only solution is to part ways. In that scenario, there is a clear need to determine how to divide the ownership of the business, and for what price. When these types of situations become adversarial, each side typically retains its own attorney. In turn, their attorney may retain a business valuation analyst capable of providing expert witness and litigation support services.
Litigation Services to Quantify Economic Damages
In the event your business faces economic damages, or is alleged to have caused economic damages to another party, working with a litigation support team to quantify the value of those damages is vital. Obtaining an impartial assessment of economic damages enables your legal team to develop the best legal strategy for your case.
Litigation Services for Divorce Proceedings
An ownership position in a business can be the single largest asset in any marriage. If you’re in divorce proceedings, assigning a value to that business is likely to be an extremely important undertaking. In some cases, this valuation is designed to assist in determining the price one spouse pays to buy the other out of their ownership position in the business.
Learn More: 6 Reasons to Work with a Business Valuation Firm
Types of Business Valuation Litigation Support
Business valuation litigation services teams provide a variety of services. If you find yourself in active litigation, your attorney can likely recommend the most appropriate solution for your unique circumstances.
Below, you’ll find a summary of the key services provided by litigation support professionals:
- Financial Analysis: rigorous financial analysis, backed by empirical data and best-practice valuation methodologies, plays an important role in presenting a creditable, supportable financial argument in any litigation or business interruption claims. Litigation support professionals will take a bespoke approach to determine exactly what happened in your case, and present the facts in a simple yet compelling manner.
- A Conclusion of Value Report: this formal report is often required when the valuation of a business is subject to legal scrutiny. These reports must be completed by an accredited business valuation firm and feature in-depth analysis alongside an independent opinion on the value of the business.
- Expert Witness Testimony: litigation services professionals may provide business valuation expert witness services, testifying to the value of the business in question. Expert witnesses take part in both depositions and trials. Seek out litigation professionals with a proven track record of providing objective and bulletproof testimony in high-stakes cases.
- Fraud & Forensic Investigations: if you suspect your business has suffered from fraud, litigation services professionals may assist you in investigating these allegations and preparing written and oral reports for attorneys, courts, and law enforcement professionals.
Litigation services firms should work with you and your attorneys to determine the most appropriate services for the situation your business finds itself in. However, keep in mind that business valuation and litigation services professionals are bound by rigorous professional standards. Their role is not to be an advocate for their client, but to develop and rigorously defend their independent professional opinions.
HoganTaylor: Experienced Litigation Support Professionals in Arkansas and Oklahoma
Retaining qualified, experienced litigation services professionals is key to a successful outcome in any legal matter where the value of your business is of significance. The litigation services professionals you entrust your case with should have the required technical skills and accreditations, a demonstrated track record of success, and a stellar reputation in your local legal community.
At HoganTaylor, our litigation support team brings all of that to the table – and more. We’ve built an excellent reputation throughout Arkansas, Oklahoma, and beyond, honed over years serving in a variety of litigation support roles. Our accredited business valuation analysts are equipped to provide a wide range of services and have proven experience serving as expert witnesses in high-stakes litigation.
To learn more, or to inquire about HoganTaylor’s litigation support services, reach out to a HoganTaylor advisor today.
How HoganTaylor Can Help
If you have any questions about this content, or if you would like more information about HoganTaylor’s Forensic, Valuation & Litigation Support practice, please contact Clay Glasgow, CPA, ABV, CFF, CFE , Advisory Partner.
INFORMATIONAL PURPOSE ONLY. This content is for informational purposes only. This content does not constitute professional advice and should not be relied upon by you or any third party, including to operate or promote your business, secure financing or capital in any form, obtain any regulatory or governmental approvals, or otherwise be used in connection with procuring services or other benefits from any entity. Before making any decision or taking any action, you should consult with professional advisors.
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