Industry – Real-Estate / Construction

Territory – USA

Client – International holding and investment group.

Case – The client was a major shareholder of a US real-estate development company that held a portfolio of 51 real-estate projects valued at approx. $3.5 billion. A Minority shareholding was held by an entity that was responsible for the development, construction and management. The management fees were determined by a formula that was based on projects value. The shareholders got engaged in a dispute following demands made by the minor shareholder for management fees in a total sum of approx. $60 million. 

Actions – We were requested to examine and determine the value of each project and activities that were executed by the minority shareholders and then to determine the entitlement for management fees. Our examination included in-depth analysis of the financial and accounting information. Along-side, during the process of valuation we used competitive intelligence methods, , in order to gather key data, which was relevant for each specific project, as well as various financial indicators that were used for comparison to market standards. The results indicated that the calculation of the management fees used by the minority shareholder were incorrect and should be substantially reduced.

Outcome – Based on findings, the parties negotiated a settlement agreement to our client’s satisfaction.