We have experience in a range of shareholder and commercial disputes. We can assist at an early stage to assist the parties reaching a negotiated resolution without formal litigation. We can also provide input in terms of a preliminary opinion ahead of mediation or a round table discussion. If the dispute is in formal proceedings we can provide formal court-compliant reports as Party Expert or Single Joint Expert. We also accept appointments in Expert Determination.
Unfair prejudice occurs when the rights of shareholders in a company are violated or when their interests are harmed. This can include instances when minority shareholders are treated unfairly, excluded from decision-making, denied information or where the majority shareholders act in a manner that undermines or prejudices the rights of the minority shareholders.
A section 994 petition is the legal recourse available to shareholders who believe they have suffered an unfair prejudice.
In such matters we are typically instructed to provide a valuation of the company and the minority shareholding and to give a view on the impact of the conduct on the value of the shareholding. This can include a detailed investigation of the company’s financial records.
We are instructed to value companies and unincorporated businesses in cases of financial disputes and also for commercial purposes.
We can provide an opinion on the valuation of the whole company and if required the value of an individual’s shareholding. The valuation of, say, 25% of the company is not necessarily a pro-rata valuation of the whole company. Our reports will consider the application of a minority discount on minority shareholdings.
We are used to dealing with complex share structures and quasi-partnerships. We have expertise in investigating companies where the accounts may not readily provide all the answers.
We understand traditional partnership accounts and Limited Liability Partnerships (LLPs). We can provide valuations of partnership interests and provide input on the tax issues regarding extraction of income and capital.
We are regularly instructed in family disputes. We can assist in providing valuations of the family business or an investigation into the financial records. An independent view can assist in resolving matters “around the table” or in mediation. In legal proceedings we can provide a court report as Single Joint Expert or Party Expert.
Commercial agents are an effective way for a business to promote and sell its goods or services and perhaps to expand geographical coverage. However disputes can arise between the agent and principal.
In agency disputes we can assist the agent or principal in quantifying the compensation for termination. This might be calculated on the indemnity basis or compensation basis. We can provide a view on the application of The Commercial Agents (Council Directive) Regulations 1993 (“the regulations”) to the quantum of claim.
We can also assess unpaid or disputed commissions.
We can assist in providing robust and considered reports to assess the financial claim in a business interruption claim. We will review the financial impact of the interruption on the insured business and the quantifiable data.
As forensic accountants, we are regularly instructed to assist in breach of contract disputes, completion account disputes, post-acquisition warranty claims and earn-out calculations.
We may be instructed as Party Expert, Single Joint Expert or to undertake an Expert Determination.
Completion account disputes arise where the parties are unable to agree the closing balance sheet position at completion. The forensic accountant will consider the contractual terms, the historical accounting practices and the relevant GAAP (Generally Accepted Accounting Principles). Often completion account disputes are resolved by Expert Determination.
Earn out disputes arise in the calculation of additional consideration to be paid at a future point and possibly dependent on targets around profit generation. The forensic accountant will need to interpret the sale purchase agreement to assess the methodology to apply in ascertaining the quantum of further consideration. As with completion account disputes it is typical to appoint an expert to undertake an Expert Determination to resolve disputes.
Expert determination is often used to resolve disputes. It is typically used for technical or valuation issues. Expert determination by an independent expert is private and it is normally quicker, cheaper and less formal than arbitration or litigation.
The use of Expert Determination can be set out in the sale purchase agreement and if necessary may be enforced by the courts.
The expert’s decision is normally final and binding and can only be challenged if there is manifest error.
We can act as independent expert in matters requiring expert determination such as disputes arising on completion accounts and earn out calculations.
Warranty disputes arise from breaches of warranties given as part of the contractual agreements in the sale of a business. Typically warranty claims arise from accounting issues. If the warranty is shown to be untrue the buyer may have a claim for the reduction in the value of the company. As forensic accountant we will consider the value if the warranty was true as opposed to the value with the warranty found to be untrue.
Getting in Touch
Fee estimates and CVs are readily available. Quotes can typically be provided within two working days.
Email: fiona@fhmforensic.co.uk
Telephone +44 (0)7770 642491