Challenges in Business Valuations in a Divorce with Ron Seigneur Episode 206

In this episode of Divorce at Altitude, Ryan Kalamaya engages with Ron Seigneur, a seasoned expert in business valuations, to dissect the complexities and nuances of evaluating closely held businesses amid divorce proceedings. With the holiday season approaching, and everyone looking for discounts, this conversation is particularly timely as it explores the financial intricacies involved when a business is part of the marital assets.

Episode Highlights:
- Valuation Basics: Ron Seigneurelaborates on the foundational aspects of business valuations, including the different types of value—fair market value, fair value, and investment value—and how these impact the final valuation in a divorce scenario.
- Discounts and Goodwill: The discussion delves into the critical concepts of marketability discounts and the distinction between enterprise goodwill and personal goodwill, shedding light on their relevance in divorce valuations.
- Legal Precedents: The episode examines key legal precedents affecting business valuations in Colorado, particularly the implications of the Thornhill case, which introduced flexibility in applying different valuation standards.
- Volatility and Future Projections: Ron discusses the challenges of valuing businesses amid economic volatility and the increasing relevance of forward-looking financial models in today's dynamic market conditions.

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Ryan Kalamaya and Amy Goscha provide tips and recommendations on issues related to divorce, separation, and co-parenting in Colorado. Ryan and Amy are the founding partners of an innovative and ambitious law firm, Kalamaya | Goscha, that pushes the boundaries to discover new frontiers in family law, personal injuries, and criminal defense in Colorado.

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DISCLAIMER: THE COMMENTARY AND OPINIONS ON THIS PODCAST IS FOR ENTERTAINMENT AND INFORMATIONAL PURPOSES AND NOT FOR THE PURPOSE OF PROVIDING LEGAL ADVICE. CONTACT AN ATTORNEY IN YOUR STATE OR AREA TO OBTAIN LEGAL ADVICE ON ANY OF THESE ISSUES.

Transcript

Ryan Kalamaya: 0:04

welcome back to another episode of Divorce at Altitude. This is Ryan Kalamaya. This week we're going to be talking about discounts. We are entering the holiday season as the, at the time of this recording and everyone's looking for a discount and That would also apply to Eric and Melanie Wolfe, our hypothetical divorce clients going through a divorce of their own and specifically when involving businesses. And in previous episodes Amy and some of our other guests have talked about discounts and business valuations, but this week we're going to be talking with an expert on business valuations, Ron Senior. He wrote an article for the Colorado Lawyer. We've referenced that trade publication before in October, and he addressed some of the issues and Uncertainties in Business Valuations that frequently do come up and we're going to dig into those with Ron, but let me introduce our listeners to who Ron is. He's a founding partner of Senior and Gustafson which is based in Lakewood, Ohio. Colorado. He's responsible for financial forensics, business and intellectual property evaluation, practice management consulting, and exit and succession planning services. He's the co author of several articles, books. He's starting a guide, a financial expert guide for family law professionals and judges. We're going to talk about that at the end. He's an adjunct Professor at the University of Denver, Dan Daniels College of Business, where he teaches business appraisal classes. And he's also the vice chair of the Business Valuation Committee for the American Society of Appraisers. I could go on and on. We could talk about Michigan State versus University of Michigan, where he got an MBA and all of that. But before I go on, Ron, welcome to the show.

Ron Seigneur: 2:02

Thanks, Ryan. I'm really excited to be here and I will enjoy the opportunity to discuss what we're going to go through today.

Ryan Kalamaya: 2:11

Yeah, so let's lay the groundwork. Eric Wolf, our hypothetical divorce client, he is going through a divorce and there's a business. So can you tell our listeners, What are the different kinds of value that one would look at in a divorce or just in tax or some other valuation metric when we're talking about a closely held business?

Ron Seigneur: 2:36

Yes, absolutely. Whenever we're engaged to value a closely held business, there are three fundamental questions that we always start with. Regardless of whether it's a divorce or an m and a transaction or estate planning, the date of valuation, what date do we need it valued as of, because value can change based on. Yeah. I mean there's a number of things in the economy and COVID and everything else. The premise of value, is it a going concern versus is it a business that's about ready to be liquidated? And the standard of value. And there are three primary standards of value to choose between. There's fair market value, which is defined by the US Treasury and it's in the regulations used for tax related valuations and other purposes. There's fair value and there's fair market value. I'm saying investment value. And Each of those standards of value will lead you to a different result when we go about doing our analytical procedures to come up with an opinion as of the value of Eric Wolf's business. In divorce in Colorado typically the two choices are fair market value and fair market value is essentially what's it worth between a willing buyer and a willing seller. Each being knowledgeable of the facts and neither being under duress to complete the transaction. That's paraphrasing the U. S. Treasury definition of fair market value. Versus investment value, what's it worth to a specific individual? And in Colorado Divorce, There's case law that supports investment value, sometimes in Colorado divorce known as value to the owner versus fair market value, the definition I just gave. And those are at the, it's a legal distinction. It's at the discretion of the court in Colorado. And if the court chooses fair market value. You might get to apply discounts to Eric's interest in his closely held business, where if it's the value to the owner, the value to Eric, typically discounts aren't appropriate. And I can expand on those, but that's at least the initial ground rules.

Ryan Kalamaya: 4:53

Yeah. So can you get into some of the characteristics that would maybe be different between investment value that would be representative of fair market value? So like you mentioned that, what are the kind of characteristics of a seller and a buyer that is assumed in the fair market value? hypothetical or premise of value?

Ron Seigneur: 5:18

Under the definition of fair market value, the expanded definition is that the buyer and seller are hypothetical individuals. They're just the average buyer, average seller, each being knowledgeable of the pertinent facts and neither being under duress. It also assumes that there is an appropriate exposure. of the business or the portion of the business to the marketplace that neither are under kind of a time constraint. The values defined in cash or cash equivalents, and that makes up the definition of fair market value broadened out, if you will, for the other elements of the definition. Versus Investment value, what's it worth to the specific individual? And I like to, in, in the context of family law, I like to say, what is Eric willing to pay into the marital estate to retain the benefits? of the ownership of his business or his professional practice. And it's what are his motivations, because he may have certain client relationships, vendor relationships. He may have motivations. He has a certain tax status that's unique to him where a hypothetical buyer is like in an average tax position, if you will.

Ryan Kalamaya: 6:36

And Ron, what do you, what's your observation about Eric in terms of what's he going to be arguing? Investment value or fair market value in the divorce?

Ron Seigneur: 6:48

Likely arguing fair market value particularly if his ownership is less than a controlling interest. Because under. The definition of fair market value for a minority ownership, that being less than a controlling, which is typically 50 percent absent voting arrangements. You get to take discounts for lack of marketability, the fact that it's a closely held business as compared to a publicly traded security. And a discount for lack of control, sometimes called a minority interest discount, those are synonymous terms, but if Eric owns a 25 percent interest in Acme Widgets, for example, under fair market value, what would a hypothetical Willing buyer pay for Eric's 25 percent interest in Acme widgets. They're going to say, gee, I don't have control, and I can't turn around and liquidate my interest because it's a closely held business. Therefore, I demand discounts. And those discounts can It's subject to professional judgment that there's lots of resources on how you determine the magnitude of discounts, but a 20, 25, 30 percent discount for both lack of marketability and lack of control is not possible. inappropriate under a fair market value definition for a lack of a less than controlling interest.

Ryan Kalamaya: 8:13

We'll talk about those discounts because that is always interesting to me. But for listeners, I just want to zoom out a little bit in the sense of Because the reason that Eric would, if he's going to get the business that he would argue for a fair market value is because there's going to be additional discounts and it's going to be less on his side of the ledger or in his basket of goods that are going to come out of his divorce. And so that means that he has to offset or pay Melanie less so he's going to. Argue the fair market value and, but Ron, let me ask you, if Eric says, listen, apple or Tesla or any of these companies, publicly traded companies, that's that's a real business, but this business. that I run. It's a closely held business. I can't get anything for it. I'm not it's just me. It's just goodwill. Can you explain for listeners that may be thinking along the lines of Eric, about how Colorado views goodwill and just business, closely held businesses, just in general?

Ron Seigneur: 9:24

Ryan, now you've cracked the door open into another kind of hot area and that's goodwill and distinguishing what we call enterprise goodwill from personal goodwill. Some businesses and professional practices are highly dependent upon the individual or the individuals to bring the business in the door. The reputation is the individual. That happens a lot with attorneys and doctors and accountants for that matter, where some businesses, it's the business itself that has value. It's the enterprise. We've created a brand and people know the brand and it's beyond kind of the individual or the individuals that own it. And there's lots of arguments and tools and methodologies to try to put a number on the goodwill. It happens a lot for tax planning and financial reporting. It's all subject to a lot of professional judgment, in a business like Eric has, you're going to look at saying, how important is Eric to this business? If Eric gets hit by a bus will the business survive? Will it take a hit? Will it go on as it has before? And those are all things that as a business analyst we consider that as part of the equation of trying to figure out what Eric's interest is worth.

Ryan Kalamaya: 10:43

Yeah, the short answer for listeners is that those professional businesses, the lawyers going through divorce, the doctors going through divorce, the accountants that they will say, this is just, it's just me and the way that Colorado views it is a little bit different than maybe some other states. And like the appreciation on separate property, and Colorado has a fairly progressive view on appreciation of separate property being considered marital, there's also a pretty progressive view in terms of valuing professional businesses with respect. So that's why you get into these arguments, because a lot of times businesses don't will exist and we're valuing businesses in divorce. So Ron, going on to the investment value versus fair market value. So investment value, your article gives the overview and for listeners, there's a, the seminal case is Thornhill. And so sometimes people will say, give me a Thornhill discount or something. And so can you explain Thornhill and what that did for you, Ron, as a business valuation expert? What, what happened, what you were doing before Thornhill and what you were doing. Now in, in the issues that arise from Thornhill

Ron Seigneur: 11:59

The short answer is Thornhill created more work for us because it broadened the the landscape for judicial officers in terms of being able to, between fair market value and investment value prior to Thornhill the. Case Law, Graf, Martin, Huff are the three that I always think of. Always said, the value of this business or this professional practice is the value to the owner. The investment value to the identified individual. And then along came Thornhill. Thornhill was a divorce case in Grand Junction. Mr. Thornhill was the 70 percent owner. of his business that was an oil field services business and the appraiser used fair market value and took a 35 percent discount for lack of marketability on Mr. Thornhill's 70 percent controlling interest. So that in and of itself is unique that you'd have a 35 percent discount on a controlling interest versus a minority interest because Mr. Thornhill owned a 70 percent interest. That case was appealed to the Court of Appeals and appealed to the Colorado Supreme Court that the trial judge did not dis abuse his discretion in allowing fair market value to be used. It didn't opine on the magnitude of the discount, which is unfortunate because that discount's just way out of line with with what we normally see, but so it allows the trial court now to say, gee, we can use the Thornhill fair market value precedent, or we can use the long standing Graff Martin Huff precedent of value to the owner, and it gives the trier of fact A broader range of discretion of kind of what value they want to use for the business interest at issue

Ryan Kalamaya: 14:01

in essence and correct me if I'm wrong, Ron, but the marketability discount that 35%. That is a 35 percent discount on what would have been just the normal investment value, but it was to essentially compensate the owner, Mr. Thornhill, or in our kind of hypothetical situation, Eric, for the lack of liquidity the aspect that he would need liquidity. presumably to have a business broker and to sell the business that there would be a commission with that and he couldn't, liquidate that business interest in the same way of an Apple stock or Tesla or something of that variety. And so essentially there was This kind of phantom 35 percent interest, even though he may not ever sell, Mr. Thornhill may not have ever sold that oil and gas service business in Grand Junction. So is that one way to look at it? And the result in 2008, which is what happened with Thornhill is now business valuation experts are routinely. Giving two numbers. So there's the fair market value number if Eric and Melanie are going through a divorce and I call up you, Ron, and I say, hey, we want you to be a joint expert. Can you value Eric Wolf's business? Then what are you going to put in terms of your numbers? Are you just going to put one or are you going to have the investment value and fair market value?

Ron Seigneur: 15:33

There's two things I'd like to address. One is the 35 percent discount in the lack of liquidity because even though Thornhill's business was a closely held business as compared to an Apple or Tesla where you can call your broker and say, I want to sell my Apple stock and, put the money in my account within three business days. Thornhill is closely held, so Mr. Thornhill, who had discretion at 70 percent to say, I want to sell, he would need to go find a broker and pay probably some professional fees. So there is indeed a liquidity discount that would be applicable for a controlling interest, but that's typically a 5 or 10 percent discount because Mr. Thornhill, even though it may take him a year or two to sell his. He's got his oil field business. He still gets the benefit of his ownership while he's putting it on the market and, going through the, the process to get it sold. To your second point, you call and say, gee, Ron, we'd like you to value, Eric's business. And I say what standard of value would you like me to use? And you say I don't know, what's appropriate? And I go, it depends on what the court decides. chooses to apply. And we're not going to know unless we get an advanced ruling, which is highly unusual in family law for the judge to, say, I'll, I stipulate that we're going to use X, standard. I tell you, I'll do it both ways. And then when we get to court, we can the judge now has the latitude to say, here's senior's fair market value opinion and here's senior's. Investment value opinion.

Ryan Kalamaya: 17:07

The theme through your article, which I really did appreciate was that we have a messy situation right now and it's not, I don't think helpful to Eric and Melanie Wolf because it's good for a divorce lawyer like me. Cause I can argue if I'm representing Eric, I'm going to argue for fair market value. If I'm Melanie, I'm going to be arguing for investment value. We really don't have any guidance from the court on when is it is appropriate to apply. And we get into these arguments about I've seen this judge do this in this case. And I've seen that judge do that. And you don't really know, if. I know my judges because I practice in limited areas very, intimately and I have a pretty good idea, but how, what are the things that parties and family law attorneys and judges can do to reduce those arguments or to overcome some of those disagreements, Ron?

Ron Seigneur: 18:08

They can agree on the standard of value to be applied in advance of engaging a, a valuation professional to be involved, saying we're going to use, investment value for this particular assignment and have at it. Now, the, and typically I've seen that happen but normally it's we don't know what the judge the judges like the discretion of being able to push the number one way or another to it's a court of equity as I, I'm reminded continually and I'm sure you are too, and they're trying to get to an equitable result and sometimes, We're not quite sure how they, how they determine what equity is in the final analysis.

Ryan Kalamaya: 18:53

What instances do you think a judge, it's appropriate to use investment value versus fair market value? Can you give our listeners some instances when you apply different standards of value?

Ron Seigneur: 19:09

Yeah. I think that one of the issues is if there isn't any evidence of a. Impending sale of the business that the property spouse, the owner of the business is going to continue to own it and run it. And it's going to be a going concern. It's just going to continue on as it has in the past. It's that continuing ownership interest that provides the value to that individual. And, unless there's an eminent sale to me, that, that is strong evidence that, the value to that particular individual at their tax rate ought to be what's appropriate to apply.

Ryan Kalamaya: 19:49

And can you give the listeners, can you talk maybe a little bit, we've talked about the marketability discount, the 35%, when I'm arguing for Eric Wolf, I love Thornhill because that is an extraordinary discount. Rate when you consider it to Shannon Pratt or some of the other valuation resources, guides that exist out there on valuations, 35 percent is extraordinary. But what things go into, for example, a lack of control or a minority discount. When can you give us kind of some different examples of Eric Wolf if he owns 51 percent of a condo in the United States? Florida with his friends. Is that different than he owns a 10 percent interest with his family partnership or, he's the CEO of a company that has 90%? What, can you walk us through some of the things with respect to the minority discount?

Ron Seigneur: 20:47

Yeah, I'll use an example to answer that. Let's say you're valuing a 2 percent interest in a business. Somebody only owns 2%. But the other two owners each own 49%. All of a sudden your 2 percent interest is night and day to either of the 49 percent owners. that they'd be willing to pay a premium for your 2 percent because maybe they don't like their, the other 49 percent owner. It could be a family member, it could be anybody, but you know if I can buy your 2 percent now all of a sudden I'm the controlling person with 51 and I can make it difficult for the 49 percent owners. So you, now if you're 2 percent owner and you know you're one of 52 percent owners, then, nobody in the other 2 percent pool is going to be willing to pay you much because, gee, I go from 2 percent to 4%, no big deal. So that's one way to you can't look at it in a vacuum. And a lot of it has to do with kind of what's the marketability of the interest. There's some Types of businesses that are, if you put it up for sale, people would buy it. Others, it's eh, it's, that's an old and tired thing and it's on its way out and, we're not going to pay you a premium for it.

Ryan Kalamaya: 22:03

So if it's an estate planning lawyer, those practices generally will, there's a market for those because, they have existing client relationships, they're generally long standing relationships, and it's going to be different than, a firm. That is, like my firm that does personal injury, family law and criminal defense where there's a fair amount of turnover. And and if there's no indication of that there's going to be a sale, is that run where you're looking at more like an investment value? For. the kind of practice like, my firm versus an estate planning attorney that, is maybe 50 years old that's been talking about succession and, that has done some preliminary analysis on selling his or her law firm.

Ron Seigneur: 22:54

Great question, Ryan, and it delves into an area that is an area of focus for us because I was a legal administrator back in the 1980s for about seven years with a 50 attorney firm and have worked with a number of firms and valued a number of law firms for various purposes, but in a state planning firm has a file room full of Files waiting to go through probate and it is just it's a money machine'cause of, the what's in the file room versus, like you said, someone that's, a criminal law attorney that you know, I wanna hire, you know that person because that's the best person to do this and I won't. I'm not going to, I won't take a second line. So the first practice has a lot of goodwill, value associated with the files. The second, it's all in the individual. And when that individual goes, so goes the value proposition.

Ryan Kalamaya: 23:47

Yeah, and I think that, a CEO or a tech executive in Boulder, if Eric Wolf, if he's got a company that is a crypto business or a cyber security, and it's clear that the ultimate goal is to be acquired or to sell, do an IPO. It's gonna be different than if he's an anesthesiologist that gets, the country club and his car and all of these value, added. these perks, these fringe benefits, and there's just no indication that there's ever going to be a sale of that interest in whatever that medical practice is. And so is that, are those kind of examples of when it might be appropriate to use a fair market value for the, Kind of tech executive that you know that there might be a sale and they've been talking about it versus, the doctor that has, is more likely gonna be an investment value or the value to the owner?

Ron Seigneur: 24:47

Yeah the, the anesthesiologist, you're gonna take a close look at what that person's being paid in relation to their peer group pay to see if there's. Anything above and beyond kind of their peer group compensation that might be evidence of profits from maybe a larger anesthesiology practice versus the tech guy, the value might be, the payoff that's already targeted that we're going to build this up and sell it. So the whole valuation mindset in it from our end is different, different. different things are in play. Reasonable compensation for the owner employee is always, with either of those two examples, is always at play where we're going to be looking at what's that anesthesiologist, how hard are they working, what are they getting paid for their years of experience in the geographical area that they serve, and any specialty designations in relation to what they're actually earning to see if there's some profit above and beyond their, the value of their services. And that's always just an important part of the, the analytical process, if you will.

Ryan Kalamaya: 25:55

Yeah. And for listeners they, generally speaking, there's these professional decisions that are made by people like Ron where they'll say, this is the discount. You heard him talk about opine on different discounts and then, but always reasonable compensation because Ron, what happens to the business valuation when that reasonable compensation is 500, 000 for Eric Wolf compared to 250, 000 just as a general matter? Yeah. Yeah.

Ron Seigneur: 26:25

When you're saying Eric's earning 500, 000 and his peer group is 250, 000?

Ryan Kalamaya: 26:30

When he, if you determine his reasonable compensation is 500, 000 compared to 250, 000, what does that do to the value of the business, just between those two, that decision between 500,

Ron Seigneur: 26:46

It means that there's no profit to the enterprise, that it's all, it's You know, Eric's potentially being overpaid for his services, but if the true value of Eric is, that amount and he's not receiving that, then, there's nothing left in the business in terms of a value proposition.

Ryan Kalamaya: 27:05

Generally speaking, the higher the reasonable compensation for the party in the divorce, Eric Wolf, the lower the business valuation, because it just means that there's less profits, and so Eric is always arguing, Ah, my compensation should be higher, it should be higher, and they're always So what are the things, Ron, to switch gears a little bit about volatility? Right now, as we're recording this, it, there's a lot of volatility in the market and the economic climate. What are the challenges and how do you address those as a business valuation expert, when you've got these uncertainties on, what premise of value do you even start with, but then even taking it a step further, how do you reflect the volatility and how does that come into play with your valuation opinions?

Ron Seigneur: 27:55

The best way for me to answer that is with everything that's happened the pandemic pause and supply chain disruption, and even what we're currently experiencing with, inflation, it's made a historical activity for a lot of businesses. I'm deeply grateful to have you here and I'm very honored to be the president of the CFI, a non profit, and Philadelphia distribution operator. for being here. With respect to the FII, it's a couple of things I want to talk about. One is the FII, which is the Federal Financial System in a lot of ways. We have the FBI Department of Justice, which is basically the Chief Justice of the United Reluctant to use forward looking models. Discounted cash flow. Let's project out what the business will earn. Let's deduct out reasonable compensation for the owner employee, figure out what profit is left over, and present value that back to today at an appropriate risk adjusted rate. As an indication of the value of the business above and beyond the service of the owner employee. Now, we like that because it's, today it's becoming a more useful model because we can't look at, valuation multiples from databases that we have because they're just obsolete. They're, they're no longer relevant because of, Despite the pandemic disruption and so on. The courts are slowly coming around to embrace forward looking models because they understand that it gets to A better result. At least a more supportable result. Notwithstanding that it requires speculation into the future, how's this business going to perform in the future, speculation of what tax rates are going to be appropriate in the future, versus just looking at five years worth of tax returns and waiting those, 5, 1. That's the way it was done when we had a stable economic environment for, the luxury of 15 to 20 years until maybe three or four years ago. But, our whole world has changed as valuation practitioners where we're being called upon in many venues well beyond family law to do more forecasting, projecting, present value analysis to come up with our valuation opinions.

Ryan Kalamaya: 30:16

Yeah, maybe to highlight that would be a scenario where Eric Wolfe, if he's a mortgage broker and he's just crushed it in 2021 and 2020 because real estate and interest rates were really low. And then the Fed starts raising interest rates and now mortgages are at, historic high or at least, recent history. Hi, and the mortgage refinance, the originations on mortgage, if he's a mortgage broker, they have completely dried up. So to your point, Ron, it's saying, all right, Eric, let's look into the future because if we look at what Eric earned over the last five years or last year, last two years, it's just not that was an aberration or it's not going to be a real good predictor of what he's going to earn in the future.

Ron Seigneur: 31:06

Ryan, the example of a mortgage broker is an excellent example of somebody, like you said, if you look at past performance, they're just knocking it down. Now all of a sudden they've just run into a wall, where their business is coming to an abrupt, may not stop completely, but it's, the future is not, Anywhere, like what the past is indicates?

Ryan Kalamaya: 31:28

I think a lot of people listening to this, it's like what are my takeaways? What can I do if I'm Eric Wolf and I'm a mortgage broker? Am I just screwed? Because, the Colorado first looks at personal goodwill and then there's no real guidance and this is just gonna be fodder for a bunch of lawyers and experts and everything. So what, our takeaways for Eric. What were things that he could do to. Mitigate his risk and maybe as part of that, you could talk about your financial expert guide for family law judges and attorneys that you guys are finalizing.

Ron Seigneur: 32:01

Thank you for that reference. You, with Eric being using an example of being a mortgage broker. There's always going to be how long is this disruption going to last? At some point we're going to get back to, the real estate industry is not going to go away. People buying and selling houses is not going to go away. Interest rates will moderate. There has to be some kind of understanding of, how long this period of extreme volatility in that particular sector is going to last as part of the kind of the valuation equation, if you will. But to talk a little bit about the book that we're publishing, it's called the Financial Expert Guide for Family Law Judges and Attorneys. And we have what's called the Colorado edition that's been out for a couple of years, but we're just in the process of finalizing the national edition of that book. that we hope to have out by the first quarter of next year. The three authors are myself John Tatlock, who's a family law attorney here in town, and Kevin Yiannopoulos, who's another valuation professional like myself based in Tucson. And it's going to be published by Business Valuation Resources, and it's intended to be a resource for the less experienced family law practitioners. And frankly, a lot of judges that, a lot of the judges on the bench these days are coming, they're assistant DAs that know everything about prosecuting a DUI, but when it comes to how do we value Eric's, closely held business interest, it's like They're lost in the haze. So we talk about standards of value, methodologies, discounts, all the types of things that we as valuation practitioners need to do to render a credible opinion on the value of a business.

Ryan Kalamaya: 33:47

Yeah, and I used to be a DA and it took me a while to understand some of these issues and I was fortunate to have people like you, Ron, that guided me, experts, family law attorneys, they can't know everything, but I think for Eric the point is to make sure if there is a business involved, to make sure that they have an attorney that can It's a great way to get people involved. It's a great way to get them to understand, some of these issues and can persuasively present their case. But also, either to have a joint expert and potentially a consulting expert. We've had various episodes on joint valuation experts and we'll have some of those referenced in the show notes, the kind of strategy involved. But really to have someone like you, Ron, that is looking over the, someone's shoulder and they know. that things are handled appropriately because there are some joint experts that could just use a five year average on a mortgage broker business and then you get into the arguments and it's not as if Eric is totally screwed because he does have options. It just depends on what the original kind of valuation, I'm going to be talking about how to work out with Melanie and her attorney, if they can come to an agreement on a premise of value and to try to really narrow those issues. But I think the point of this episode is to educate Eric and other, especially less experienced, attorneys About the kind of various landmines that exist out there when it comes to valuing, valuing closely held businesses and to make sure that they have the resources. And it could be the financial expert guide or your, service or somebody in, like you coming. To their side to help guide them, whether it be questions that, to ask at trial or to push a joint expert to really oversee that. But I think a lot of people come into divorce, especially people, an Eric Wolf that we've referenced and they just are not. naive, but they are they're in for a rude awakening because there are a lot of arguments and uncertainty, which is the point of your article.

Ron Seigneur: 35:59

I was privileged to be asked to submit the article and it went through a pretty rigorous editorial process and I did get a call because I talk about a particular case where the standard of value was front and center as the key issue between me and the opposing expert and I tried to appropriately sanitize it, but I did get a call from the, this was an arbitration. I did get a call from the arbitrator after I published the article and he was laughing. He was saying I was totally on point, but he was able to see who I was talking about. So I guess that was not a bad thing, but yeah, it was a real life example.

Ryan Kalamaya: 36:46

Yeah, no, and I have, we have, I have actually an article coming out in the Colorado Lawyer in January in that the editorial process is, as you say rigorous, but Ron, really appreciate the time for people that may want to learn more about you. Can you give listeners, what's the best way to get in touch with you and find you if they have any other questions on the law? Valuation and, you might explain to listeners you do consulting in particular on cannabis industry and your firm does can you maybe sign off with giving an overview of other services that your firm provides and where they can find you?

Ron Seigneur: 37:21

Yeah, absolutely, Ryan. Thank you for that. Our website is CPAValue. com. One word, CPAValue. com. You can go there to find information on our firm and a way to get in touch with me. We have another website, FinExpertDivorce. com, F I N ExpertDivorce. com, which is a website for our book, The Financial Expert Guide, so you can find information on that. I've been a licensed CPA here in Colorado since 1981 and a founder of a CPA firm that we do, 2, 000 tax returns. I have a partner that has a very unique specialty in animal hospitals and veterinary practices. He has about 80 veterinarians in animal hospitals. So that's a unique specialty for our firm. And as you said, we've gotten into the cannabis space where we do a lot of valuation around the country on cannabis licenses Dispensaries, cultivation facilities. I just got a call earlier today to value a consumption lounge license in Las Vegas. And I'm just, it's cannabis is like valuation on steroids where, we take everything I've learned over the last three decades and now, put it in the cannabis industry and it's just, it's absolutely fascinating. So I've been, I'm having fun with that.

Ryan Kalamaya: 38:36

Get ready for the magic mushroom psilocybin gold rush here in Colorado. I think you, you might be seeing some businesses crop up around that, but Ron, we'll have links in the show notes and thank you everyone for joining us on Divorce at Altitude and Ron, thank you. Appreciate it.

Ron Seigneur: 38:54

Thank you, Ron.

Ryan Kalamaya: 38:57

hey everyone. This is Ryan again. Thank you for joining us on Divorce at Altittude. If you found our tips, insight, or discussion helpful, please tell a friend about this podcast. For show notes, additional resources or links mentioned on today's episode, visit Divorce at Altittude dot com. Follow us on Apple Podcasts, Spotify, or wherever you listen in. Many of our episodes are also posted on YouTube. You can also find Amy and. Law or 9 7 0 3 1 5 2 3 6 5. That's aaa.