Implementing a Successful Business Solution in a Divorce Settlement
A husband and wife jointly founded and ran two successful businesses. During their divorce the parties agreed that continued co-ownership would be unsustainable, and the wife, a Socius client, agreed to be bought out. When the parties’ competing business valuations differed by millions of dollars because the husband’s valuation expert predicted significantly reduced revenues in the years following the divorce, the case seemed headed for an expensive and draining trial. Socius lawyers employed a novel solution that resulted in the parties’ settlement short of trial. Although the husband purchased the wife’s interest at a value based upon his expert’s prediction, he was also required to place substantial funds into an escrow account. The wife was to be paid from this account in varying percentiles, depending on whether revenues reached benchmarks predicted by her valuation expert. The parties agreed to make a final determination of the division of the escrowed funds six years after the divorce, however, revenues were so strong—and so consistent with the wife’s expert’s predictions—that the husband delivered 100 percent of the account to the wife two years early.
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