Valuing shareholdings

Compensating adjustments

In the shareholder dispute scenario, valuing a company or a shareholding may also be complicated by the misconduct or wrongdoings of others.

For example, a company director might have entered into a contract which involves substantial and excessive payments to himself or a member of his family.

That contract is obviously disadvantageous to the company and devalues the company itself.

In the circumstances of a dispute between shareholders, the court has the power to order that a valuation should take place on the hypothetical basis that such a contract had never been entered into - in effect, making a "compensating adjustment" for the wrong doing in question.