Since 2003 Rick Mertens has assisted many lawyers and their clients with litigation support services for a variety of purposes, including:
Many valuation assignments for matrimonial disputes also involve determining income available for spousal and child support. This can be an extension of the earnings analysis (i.e. normalization of earnings) work to be done on the corporate share valuation. There are a number of reasons as to why a shareholder’s reported income in his or her T1 Personal Income Tax and Benefit Return may not be equal to the potential earnings available to them for a given year from a company in their capacity as a shareholder/manager. In some instances excess after-tax earnings are retained in the company. Shareholders often receive significant personal benefits from the business. Funds can be taken out of the company in the form of shareholder loans for a period of time (i.e. building up a shareholder loan debit balance to be cleared out in a later year via dividends, which are akin to pre-paid dividends yet to be reported for personal income taxes). Rick can help counsel identify the necessary information, perform an appropriate income analysis and present the findings in a clear and concise manner.
When calculating the fair market value of a non-controlling share interest it is often required to determine whether a minority interest discount is applicable, and if so, select an appropriate level of discount to apply. Of course each situation will differ and depending on the facts, the following information and factors should be considered: