A business valuation mediator plays a crucial role in facilitating communication and negotiation between parties involved in a dispute, such as a business valuation dispute, where expert business valuers are engaged. The business valuation mediator is impartial and assists the parties in helping them reach a mutually acceptable resolution to their dispute. When working with expert business valuers in a business mediation, the business valuation mediator typically follows a structured process. This is an example of such a process but the facts, attorneys, decision makers, and business valuation experts may result in a different process than what is presented here. A qualified and experienced business valuation mediator with a background in business valuation working with business valuers will structure the process appropriate for the parties. This is an example process:
1. Pre-Mediation Preparation – setting the stage:
- The mediator conducts pre-mediation meetings or discussions with the parties (ultimate client, attorneys, and business valuation experts) involved to understand the nature of the dispute, their concerns, and their desired outcomes.
- The purpose of the discussions is to gain additional insights into the facts, the issues, the emotion associated with the issues, and the interests of the parties.
- The business valuation mediator is skilled in mediation and valuation may request information, such as financial documents, valuation reports, and other relevant data, from the parties to gain a better understanding of the issues.
2. Selection of Experts:
- In general, the parties have selected their business valuation experts, and they have prepared reports prior to initiating the process. If expert business valuers are not already involved in the dispute, the mediator may help the parties select qualified business valuation experts to assess the business's value objectively.
- Working with both parties individually, the mediator works to develop trust with the parties and to develop a process consistent with the skill level and interests of the parties. Once finalized the process is owned by the parties
- The business valuation mediator remains focused on the process as a neutral and impartially carries out the duties of a mediator.
3. Joint Session:
- The business valuation mediator typically starts the mediation process with a joint session where all parties, including their expert valuers, come together.
- Often an icebreaker and/or welcoming to all of the participants may work to help de-escalate the situation to help parties be more open the process.
- During this session, the mediator outlines the mediation process, establishes guidelines for respectful communication, and encourages each party to present their perspectives. After both parties present their opening commentary, the parties remain in joint session, or they may be asked to adjourn to separate rooms (virtual or in person)
4. Private Caucuses:
- Private sessions are referred to as caucuses. In the private caucus the business valuation mediator may meet with each party and their respective experts separately.
- In these private sessions, the business valuation mediator can explore the strengths and weaknesses of each party's position, clarify information, and discuss potential solutions or concessions.
- The business valuation mediator may shift back and forth between the party’s sharing information in a neutral way between parties. This can help the parties to de-escalate and work with the business valuation mediator towards a mutually acceptable solution by the parties.
5. Information Exchange:
- The business valuation mediator facilitates the exchange of information and documents between the parties and their experts.
- This can include sharing valuation reports, financial records, and other relevant evidence that helps in the negotiation process.
- A particular workbook or spreadsheet may be selected so that all parties are looking at the computations in a consistent manner during the process.
6. Facilitating Discussions:
- Throughout the mediation, the business valuation mediator helps the parties engage in constructive dialogue.
- The business valuation mediator generally asks open-ended questions, encourages active listening, and ensures that the experts' opinions are considered and addressed. The business valuation mediator helps ensure the resulting commentary is understood by all participants to ensure understanding.
- Before leaving the party and proceeding to the second party the business valuation mediator should pause, indicate what the business valuation mediator intends to share and ensure that the sending party is being sent an appropriate message from the sending party.
7. Evaluating Options:
- The business valuation mediator assists the parties in generating and evaluating potential settlement options.
- The impact of each alternative should first indicate the impacts of each alternative economically, socially, and environmentally as appropriate. After assessing the impact, the impacts can be assessed in terms of the relative impact to help the parties with evaluating the impacts.
- They may help the parties and their experts explore creative solutions, trade-offs, and compromises to reach a resolution. Areas of consideration may be economic, social, or environmental areas.
8. Drafting Agreements:
- When a mutually acceptable resolution is reached, the mediator helps the parties draft a binding agreement that reflects the terms of the settlement. Conflict resolution works at work.
- The agreement may include specific details regarding the valuation, payment terms, and any other relevant provisions.
- Note that this drafted agreement is simply documenting what the parties have agreed to in the mediation.
- The business valuation mediator ensures that all parties fully understand and agree to the terms of the settlement.
- Once the agreement is finalized and signed, the mediation process is concluded.
- After the agreement has been drafted and signed by the parties it may be structured in legal language by the attorneys to ensure application of state law.
Throughout the mediation process, the business valuation mediator remains neutral and impartial, assisting the parties and their expert valuers in finding common ground and resolving their dispute in terms the decision maker can understand. Mediation is confidential unlike open court. Mediation can be an effective alternative to litigation, as it allows parties to maintain control over the outcome and often results in quicker and more cost-effective resolutions. When the parties agree to the settlement there is a much greater chance that the parties will follow through and carry out the terms of the agreement.
About the author
Mike Gregory is a professional speaker, an author, and a mediator. You may contact Mike directly at email@example.com and at (651) 633-5311. Mike has written 12 books (and co-authored two others) including his latest book, The Collaboration Effect: Overcoming Your Conflicts, and The Servant Manager, Business Valuations and the IRS, and Peaceful Resolutions that you may find helpful. [Michael Gregory, ASA, CVA, MBA, Qualified Mediator with the Minnesota Supreme Court]