The value of a family business or business interest is treated as an asset and therefore part of the matrimonial pot to be distributed when it comes to negotiating a financial settlement on divorce or...
ANCILLARY RELIEF: R v R (Financial Relief: Company Valuation)
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Dec 8, 2004, 11:17 AM
Article ID :88457
(10 December 2004; Coleridge J; Family Division)  2 FLR 365
The central issue so far as valuation of the company was concerned was the amortisation of goodwill attaching to the company; the judge concluded that some add-back in relation to the amortised goodwill should take place, but only a small allowance. The entire loan accounts were to be added together and divided by two, and each party was to be notionally attributed with one half. The judge was not prepared to accept the husband's proposal for a significant discount for the risk factor of retaining shares rather than cash, as there was also a reward factor in this case. However, it was important to give the husband a realistic period in which to raise the money, and the judge produced a payment schedule which provided for payment over 5 years, with a considerable discount available to the husband for early payment.