Alvarez & Marsal publishes guidance on using valuation experts

Alvarez & Marsal, a global management consulting firm, has released guidance on effectively utilizing a valuation expert. The article, authored by Arik Van Zandt, a Managing Director at A&M, emphasizes the critical importance of early engagement of an expert, especially in divorce cases where business ownership is at stake.

Van Zandt stresses that legal counsel should identify and retain a qualified valuation expert as early as possible in the proceedings. This ensures the expert can assist in gathering appropriate documents and information. Delays in providing necessary information for business valuation can compromise the expert's ability to form a well-supported opinion and potentially jeopardize the client's financial position.

The article advises allocating sufficient time for the expert to develop a reasoned and supported opinion. Insufficient preparation time can lead to errors and oversights, and in the worst-case scenario, a late-submitted report may be deemed inadmissible by the court. Legal professionals must also ensure all available information is provided to the expert to avoid discovery blind spots and ensure the expert's work is robust.

Finally, Van Zandt recommends leveraging the valuation expert to develop testimony and questioning strategies. Experts understand the sensitivity and relevance of valuation assumptions and can assist in formulating effective questions for opposing experts, as well as developing exhibits that support the client's case.