Family Law Dispute Involving Senior Executive in the Investment Industry
Our mandate in this family law dispute included both valuation and income calculations, neither of which were straightforward.
Our client’s investment portfolio included minority holdings in many private companies acquired via private placement. Our valuation assignment required us to identify and analyze information relating to share offerings, company financial statements, investor pitch decks, shareholder correspondence and other supporting documentation to inform values at each of the three valuation dates. We were also required to consider applicable lack of control and illiquidity discounts to apply in determining fair market value.
Our valuation of the client’s deferred compensation (including stock options, restricted stock units and restricted shares) required us to review and analyze the applicable employment contracts, incentive plan agreements and asset statements at each valuation date. Our analysis included consideration of appropriate discounts for risks to apply to the value of the various types of deferred compensation.
The client’s reported income for the years under review consisted primarily of capital gains from investments and employment income derived from deferred compensation plans. Our calculations of income for support purposes required careful consideration of amounts that may be considered non-recurring and the impact of inappropriate tax write-offs on income for support purposes.
Our calculations were further complicated by the need to consider potential “double-dip” income arising from realizations of investments and deferred compensation included in the client’s net family property at each of the two separation dates.
This matter settled shortly before trial.