Implementing a successful business buyout in a divorce settlement
A husband and wife jointly founded and ran two successful businesses. When they were divorcing, they agreed that continued co-ownership would be unsustainable. Socius represented the wife, who agreed to be bought out of the business. When their competing business valuations differed by millions of dollars, because the husband’s valuation expert predicted significantly reduced revenues, the case seemed to be headed for an expensive and draining trial.
Socius helped create a novel solution that resulted in settlement short of trial. Although the husband acquired the wife’s interest at a value based on his expert’s prediction, he had to deposit substantial funds into an escrow account. Our client was to receive payments from this account in varying percentages, depending on whether revenues reached benchmarks predicted by her valuation expert.
The parties agreed to make a final determination of the division of the escrowed funds six years after the divorce. Revenues were so strong and consistent with the wife’s expert’s predictions that the ex-husband released 100% of the funds in escrow to our client two years early.