3.9: The CBV’s relationship with other professionals

Two key attributes of CBVs is their independence and objectivity. This inevitably means that most interactions with clients involve one or more other professionals.

Disputes, whether personal or corporate, usually involve at least one lawyer (or arbitrators/mediators). In situations where the CBV is jointly appointed, there will usually be at least two lawyers. The lawyers’ responsibilities are to manage the legal aspects of the case; the CBV’s role is to provide answers, or at least guidance, on valuation matters. The CBV’s mandate is usually set by one or more of the lawyers.

Reorganizations usually involve the client’s accountant, who designs the corporate restructuring plan but needs the service of a CBV for a valuation of the assets involved. The CBV’s mandate is usually set by the accountant.

Transitions (e.g. an outright sale/purchase or a partial sale to family or employees) are less reliant on outside professionals, although lawyers and accountants inevitably have some role in the transition process. The CBV’s mandate is usually set by the buyer or the seller (sometimes both). If the CBV is broking the deal, parties to the transaction should carefully consider the CBV’s independence and objectivity.

 

Clients are best served when the right professionals are appropriately engaged.

 

High value tangible assets (e.g. land, buildings, plant & equipment) may need a specialized appraiser’s report.

Before engaging a CBV, clients should consider all the other professionals who may play a role in whatever process the valuation service is required for. To preserve efficiencies, the CBV should only be appointed after the client is familiar with who will play which role.

Contact MVI for advice on which other professionals should be consulted in your situation. MVI generally does not accept engagements until the various mandates are clear.