If two people who own a closely held business are divorcing, it is unlikely that they will be able to amicably continue running a business together. Accordingly, divorce will typically involve the distribution of a family business to one or the other party; often a buy-out is necessary. To fairly determine the value of a business, and the corresponding buy-out price, parties must typically rely on expert opinions, and further upon legal counsel experienced in working with such experts.
Valuation most commonly is performed according to the price that a business could attract in the open market. This will depend on, among other factors: the nature of the business, the local and national economy, the profitability of the industry, the profitability and debt of the company, and the value of similar companies. The “goodwill” of a business may or may not be appropriate for valuation, as well as consideration of a minority interest. Often, a business is owned by one or the other spouse prior to marriage and the marital component will consist only of the increase in value of the business. This and other complex valuation issues demand reliance on a firm with our experience, whether your divorce will be resolved by agreement, or through litigation.
To learn more about what Wilder Mahood McKinley & Oglesby can do to resolve concerns about business interests in divorce, contact us online or call our office in Pittsburgh, Pennsylvania, at 412-261-4040.