Potential use of share options in divorce settlements

In this article, Trevor Slack, a partner at Griffins and former principal at Charles River Associates, discusses an approach that may be taken in valuing a family business in divorce proceedings.

The approach uses share options as an alternative to situations where the business value is disputed and the business may be either under or overvalued. Share options could be useful as they represent an indirect investment in the underlying business, but do not have the same rights carried by ordinary shares, such as receiving dividends, voting, or seats on the board.

But perhaps more importantly, if the aim of divorce proceedings is to curb extreme claims and minimise conflict, then share options may facilitate achievement of that aim. For this article, we use a husband and a wife as an example of a married couple with the husband as the owner/operator.

Read the full article here.