Family Law Dispute with Decline in Business Value Post-Separation

Valuation of car dealership business at date of separation and consideration of COVID related industry factors on current day valuation and spouse’s income post-separation.

CHS was retained in a family law dispute where our client’s spouse owned several automotive dealerships.  Our mandate included valuations at the separation date (pre-COVID), calculation of the spouse’s income post-separation, and review/critique of opposing experts’ income and valuation reports.

Our valuation analysis of the automotive dealerships included consideration of:

  • Published “Blue Sky” transaction multiples on dealership value;
  • Contribution of each operating segment to overall revenue and gross profit, as compared to industry comparable metrics; and,
  • Whether there had been a material decline in value subsequent to separation given the impact of industry and economic conditions post-COVID.

Our work also included detailed analysis of the dealerships’ financial performance over time, including trend analysis and industry benchmarking to determine whether declining profits post separation were the result of broader market trends, or factors specific to the business.  This included consideration of non-recurring income earned over the period.

This matter settled shortly before trial.

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