As part of the divorce or separation process each party is required to disclose their financial position in Form E. Sometimes the information contained in Form E submitted by the other party to a divorce can be daunting, especially when information is unclear, ambiguous or overly complex. Working with legal advisers, we review disclosures for completeness, providing a simplified opinion on the accuracy or completeness of disclosure. We also assist with the drafting of questionnaires to be sent to the other party to obtain further information and gain a fuller understanding of the financial position.
Typically a Form E will disclose earnings from a business and should disclose a valuation of any business assets owned (e.g. shares, share of a partnership or unincorporated business). The value of a business is often a significant asset to the divorcing parties yet we have seen many Forms E which ascribe a £nil value to an established profitable business.
We are highly experienced in valuing both incorporated and unincorporated businesses. We can review the Form E valuation and supporting information to build a picture of its reasonableness. We identify additional questions to be asked in relation to discrepancies and further information that may be required to verify the valuation or obtain a reasonable understanding of the underlying value.
Where the parties are involved in a collaborative process we participate in face to face meetings as necessary to facilitate information sharing and understanding.
Case examples:
Review disclosure of share valuations
Appointed to advise the wife’s solicitors on the valuation of numerous shareholdings in an investment company and various start-up businesses held by the husband and disclosed in his Form E. We also advised on the merits of settlement proposals made by the husband.
Review value of husband’s shares
Appointed by the wife’s solicitors to review a valuation of the husband’s interest in a retailer of tyres disclosed in his Form E. Also instructed to comment on the expected level of future earnings of the husband. The wife believed the business was being undervalued but we found this was not the case. As a result she was able to gain confidence over the valuation and proceed with negotiations without concern over the valuation.
Schedule of deficiencies
Appointed by the husband’s solicitors in divorce proceedings to comment on the financial disclosure of the wife and assist with the preparation of a schedule of deficiencies. The financial position of the parties was complex due to the existence of a number of family trusts and uncertainty surrounding the ultimate beneficiaries. In recent years, there had also been transfers of various assets between the wife and her parents and we were required to comment on the commercial basis for such transfers (if any).
Review valuation of husband’s shares
Appointed by the wife’s solicitors to comment on the valuation of a 45% shareholding in a number of investment property companies proposed by the husband and, if necessary, provide an alternative calculation of the valuation. The valuation was very poorly supported, relying heavily on statements made by the husband and his business partners. It was also out of date. We advised that we were unable to provide an up-to-date valuation and instead prepared a number of questions requiring information and explanations to be included in a questionnaire sent to the husband.