October 31, 2018 Articles

Business Valuation 101 for Litigators

An outline of basic concepts in the valuation process—the key to nailing your next trial or deposition involving a valuation expert.

By Marc Asbra

If your litigation practice includes disputes regarding valuation issues, then you will likely encounter a professional appraiser or other expert providing testimony in areas that many math-averse trial attorneys would prefer to avoid: accounting, finance, economics, and any other topic that involves numbers!

But the mathphobes among you need not be afraid. While it’s true that science and math support most valuation mechanics, the most fruitful areas of focus for trial attorneys will generally involve the logic, reasoning, and arguments behind the expert’s valuation processes and ultimate conclusions—areas in which trial attorneys excel.

This article is the first of a three-part series that seeks to provide practical guidance for understanding, measuring, and critiquing valuation issues that commonly occur in litigation. The current article describes the conceptual tenets of the valuation process. The second article will undertake a deeper examination into the analysis required to support critical valuation assumptions. The final article will discuss the most important factors on which to concentrate when reviewing an expert’s valuation report.

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