Loading…

The impact of COVID-19 on dispute share valuations

Share valuation for family or shareholder disputes is an inherently complex area with a wide range of factors to consider, including the financial performance of the business, the competitive environment and the specific rights attached to the shares being valued. 

Last updated: 28 April 2020

Given the subjectivity involved, this often results in much debate between the various parties involved. COVID-19 is exacerbating these issues with businesses facing the ongoing stress of trying to navigate through the crisis.

About the author

Meera Shah

+44 (0) 20 7556 1452
shahm@buzzacott.co.uk
LinkedIn

Last updated: 28 April 2020

Given the subjectivity involved, this often results in much debate between the various parties involved. COVID-19 is exacerbating these issues with businesses facing the ongoing stress of trying to navigate through the crisis.

So what impact has COVID-19 had?

The number of disputes is likely to increase during the crisis. This is often the case for shareholder disputes in periods of distress in otherwise good business relationships, as well as in periods of prolonged time spent at home on the family dispute side. It has been reported that divorce filings in China have been rising since couples emerged from quarantine in March, and it is possible that the UK will see the same results when lockdown is lifted.

COVID-19 could see some on-going disputes being settled more quickly than previously. With many issues, both personal and business, impacting individuals during this time, this could lead to parties seeking to resolve disputes more quickly in order to avoid further legal costs as well as the burden on their time. However, for many who have been in an on-going dispute for some time, they are not likely to give up the debate and accept a potentially worse outcome due to the pandemic, and therefore for those parties the pace and process of settlement may be relatively unaffected.

Valuation for shares and assets being the subject of family or shareholder disputes, are likely to face increased complications due to the decline in the global stock market and the number of businesses that are struggling to survive. Parties looking for a higher valuation would argue that any impact on their shares or assets is temporary and in the longer-term will return to the status quo pre COVID-19. However, those looking to argue a lower valuation would focus on the detrimental bearing of the crisis on the current valuation with an uncertain future outlook to boot. 

About the author

George Thresh

+44 (0)207 710 0935
threshg@buzzacott.co.uk
LinkedIn

So what impact has COVID-19 had?

The number of disputes is likely to increase during the crisis. This is often the case for shareholder disputes in periods of distress in otherwise good business relationships, as well as in periods of prolonged time spent at home on the family dispute side. It has been reported that divorce filings in China have been rising since couples emerged from quarantine in March, and it is possible that the UK will see the same results when lockdown is lifted.

COVID-19 could see some on-going disputes being settled more quickly than previously. With many issues, both personal and business, impacting individuals during this time, this could lead to parties seeking to resolve disputes more quickly in order to avoid further legal costs as well as the burden on their time. However, for many who have been in an on-going dispute for some time, they are not likely to give up the debate and accept a potentially worse outcome due to the pandemic, and therefore for those parties the pace and process of settlement may be relatively unaffected.

Valuation for shares and assets being the subject of family or shareholder disputes, are likely to face increased complications due to the decline in the global stock market and the number of businesses that are struggling to survive. Parties looking for a higher valuation would argue that any impact on their shares or assets is temporary and in the longer-term will return to the status quo pre COVID-19. However, those looking to argue a lower valuation would focus on the detrimental bearing of the crisis on the current valuation with an uncertain future outlook to boot. 

What should you do?

What should you do?

With so many challenges and concerns, it is important for business owners to have the right support behind them to ensure that disputes don’t distract them from the vital task of ensuring the business continues to operate during COVID-19. A valuation and accompanying advice from a knowledgeable, independent third party, often helps to resolve such disputes, or provides a solid foundation for negotiation and resolution. 

How we can help

How we can help

We specialise in providing independent, third party valuations for parties involved in family or shareholder disputes and are also able to act as a joint expert for court purposes. In carrying out these valuations, we take into account the wider picture to help reach a fair settlement, as well as the viewpoints from both sides of the dispute. We’ll develop an in-depth understanding of your business to complement our expertise of the current state of the markets and valuations, and provide you with the tools you need to reach a point of agreement.

Get in touch
Get in touch

For more information on the above, or to establish how an independent, third party valuation can be the tool you need to build a path to resolution, please fill out the form below.

Please complete all required fields above.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
close back
Your search for "..."
did not yield any results.
... results for "..."
Search Tags