Matrimonial Proceedings Case Study


The issue

A husband and wife were the co-owners and directors of a very profitable company that provided training on health & safety issues. The couple were in the throes of Matrimonial Proceedings and the subject of the husband’s majority shareholding in the company had been raised.

The problem

The husband’s accountant claimed that the company was only worth the market value of its net assets. As these comprised of two computers, projectors and other equipment used as training aids, it was valued in total at less than £5,000. Forensic Accounting Services was instructed during the Matrimonial Proceedings by the wife’s lawyers to assess whether this was a true valuation of the company.

What we did

We carried out a detailed review of the company’s most recent sets of published accounts to investigate how it generated the significant profits it had been making and found that it had a number of long-term contracts to provide health & safety training to several blue-chip organisations. We concluded that it was likely that, so long as the contracts could be maintained, the company would continue to make healthy profits for the foreseeable future and, on that basis, valued the company at more than £2.5m.

The outcome of the Divorce Proceedings

The parties accepted our findings as a more accurate indicator of the company’s true worth and used it in financial negotiations to settle the dispute.

For more information on Matrimonial Proceedings, or to arrange an initial meeting to discuss a specific issue, please contact us.