Share Valuation & Buy-Out Disputes

Share valuation disputes can arise whenever a shareholder is buying or selling shares in a company. Almost every shareholder dispute ends the same way – someone buys someone else’s shares. The dispute is usually about the price.

Whether a shareholder is exiting voluntarily, being bought out following an oppression finding, or a company is resolving deadlock, the value placed on a shareholding is very often the single most contested issue. Valuation disputes are technical, but the legal framework around them; how value is assessed, at what date, and whether a discount applies for a minority stake, has a major practical impact on outcome.

• Valuation methodology – whether the company should be valued on an earnings basis, net asset basis, or a combination, and which is appropriate for the type of business
• Valuation date – the date used can significantly affect value, particularly for a growing or declining business, and is often itself contested
• Minority discounts – whether a discount should be applied to reflect the fact that a minority shareholding carries less control, and Irish courts’ general reluctance to apply one in oppression cases where the shareholder was forced out
• Expert determination clauses – many shareholders’ agreements provide for an independent expert (rather than the court) to determine value, which can be faster but limits the right of appeal
• Access to financial information – disputes over what financial records and access the valuing expert is entitled to

• Instructing forensic accountants and valuation experts, and managing the expert evidence process
• Negotiating buy-out terms, including payment structure, warranties, and restrictive covenants for the departing shareholder
• Representing clients in expert determination processes under a shareholders’ agreement
• Litigating valuation disputes as part of a section 212 petition or breach of contract claim where negotiation fails