Monday, July 9, 2012

Terminal Cancer and Valuation

I already have my story theme for next month. It is based upon a recent call I received from a fellow printer. The scene: Mother and Father own the business. Many years ago, they gave their son 40% interest in the business. Each parent retain 30% ownership.
The son has been diagnosed with terminal cancer... slow growing, but nonetheless terminal, with no cures and no possibility for living much longer than another year or so. The father calls me and wants to discuss methods of valuations, because he is planning ahead and wants to be fair to all sides. When his son dies, and it will be sooner rather than later, his intentions are to buy-out his daughter-in-law's interest in the business. He neither wants a high value or a low value, just a fair valuation (and method) that all members of the family can agree upon. Of special concern is an agreed upon valuation method that would not only satisfy his son but also his daughter-in-law and possibly even her family.
Why the latter? Well, as is often the case, especially when large amounts of money are at stake, those individuals closely involved with the business will often think it is worth far more than is being offered, to the point where one party or the other feels or thinks that they are being taken advantage of. Trust me, this will prove to be an interesting story.



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