We were engaged to update a valuation we had conducted on a business recently. Click here to view that blog. New and vital information had come to light and one of the parties wanted an updated assessment of the business so the business was assessed at a date closer to the trial. The vital information provided circulated around a letter sent to the owner of the business from shopping centre management about the likely relocation of the business and the refurbishment of the new location was at the owner’s expense. The wording in the letter also indicated that if these conditions were not met the new lease would not be granted. For many reasons circulating around the uncertainty of the business created by this letter, led to our conclusion that the business’s only value was in the saleable value of the plant and equipment, and that a plant & equipment valuer should be appointed to assess this.
The opposing party did not agree with our conclusion and decided to appoint their own independent business valuer to conduct another assessment on the business. Our instructions from then on depended on the assessment from the other valuer.
- If the opposing Valuer came in at a different figure than ours, the two valuers were to meet in conference to try and agree on a particular figure.
- If a mutual figure cannot be agreed to, both valuers would be presented as expert witnesses by their appointing parties to be cross examined in court.
The second valuation came in very similar to ours, the only difference was they had placed a figure on what they felt was the value of the saleable plant & equipment. It was our suggestion that based on the fact that two experienced expert business valuers came to the same conclusion that an independent plant & equipment valuer should be appointed to produce a final figure. The trial is ongoing.