Many of our clients in Coral Springs or Weston, either own their own business or own a piece of a family owned business. In 2018, both of our divorce lawyers, Hale Schantz and Laura Schantz, jointly tried a case in Broward Circuit Family Court where the dispute concerned the value of 17 restaurants owned by the Husband. Both parties retained experts concerning the value of the 17 restaurants. The value of the Husband’s businesses became the central focus of the divorce trial. When the value of the business is established, the Court should order the Wife her 50% share in the Husband’s 17 restaurants. Not so amazing is that the experts were many millions of dollars apart in their evaluation of their value of the family owned business. The fight before the Divorce Court surrounded dispute over millions of dollars greater than the Husband believed that the Wife was entitled to receive as equitable distribution.
In order to obtain the best possible result for our client, we educated ourselves about how business evaluation experts go about evaluating businesses for the purposes of equitable distribution in Florida. The factors how business evaluation experts go about their evaluation could in our case swing the award of several million dollars. Our case came down to a battle of the experts and which expert had more creditability before the divorce judge making their ruling. In order to properly cross examine the other sides business evaluation expert we had to completely immerse ourselves into the buying and selling of these type of restaurants and how fair market value is determined for purposes of receiving an appropriate award of equitable distribution from the divorce court.
The essential value of a business in Florida for divorce purposes deals with the concept of fair market value”. Generally speaking, in Florida, fair market value is defined as what would a willing buyer pay a willing seller without any force, threats or undue influence. For a more definitive explanation of “fair market value” we can explain the concept if you make an appoint to see one of the divorce lawyers at Schantz and Schantz. If you would like to read more about business evaluation you can read books and articles by Shannon Pratt or Gary Trugman. Both Mr. Pratt and Mr. Trugman are known experts in the field of business evaluation. Their books and treatises on business evaluation are available from on-line book sellers. Once fair market value is determined by the divorce judge will normally equally divide the marital asset’s value between both the Husband and the Wife. For this reason, if was crucial that we were able to cross examine the other sides expert concerning the issues of “fair market value”, marketability discounts for privately held companies, sales projections, historical transactions concerning similar restaurants, projected taxes, projected improvements and many more complex issues that the experts used to drive up or drive down the value of this marital family business. Needless to say, our divorce lawyers spent weeks and months learning the ins and outs of how to cross examine the other sides business evaluation expert.
So how did this major divorce trial primarily dealing with the value of the Husband business work out? Each day the Court would ask the parties are they sure that they don’t want to settle the case between ourselves without waiting to see how the Court would rule. Each day of trial, the parties refused to settle and no progress was made until day five of trial. Long story short, after almost two years of litigation, hundreds of hours spent by divorce attorneys and their forensic experts the case settled right before the last witness was called to testify. Needless to say, we fought and fought until we reached a fair settlement for our client.
If you would like to speak with the divorce lawyers at Schantz and Schantz concerning the value of your family owned business and how the value is determined for divorce purposes you can reach us at 954-385-1536 in order to schedule your consultation.
