Meet Joe Attorney and David Client. Client is a minority shareholder of ABC Enterprises. ABC’s majority shareholder has forced Client out of the business. Now Attorney needs to ascertain the fair value of Client’s interest in the company under Florida’s appraisal rights statutes. The case is scheduled to go to mediation in a few days, and Attorney would like a ballpark figure as a basis for negotiations during mediation.
Enter Mr. Financial Expert. Attorney and Client provide Expert with the basic information: financial statements, tax returns and a rudimentary history of the business. Expert agrees to perform a calculation of value and considers only one agreed-upon valuation approach in this instance, an income approach. But Expert does not perform an economic or industry analysis. Nor does Expert perform any research on comparable transactions or companies a market approach.
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