A nightclub business was bought and sold, with a total price (including deferred consideration) that was to be adjusted £1:£1 for the difference between the completion net assets and target net assets of £9.1m. Nearly two years later, despite many meetings and extensive correspondence, the parties remained at odds, at £8.9million (Buyer, no consideration adjustment) or £9.5million (Seller, £0.6million adjustment).
We were appointed to undertake an expert determination as to completion net assets and the deferred consideration adjustment. We had to analyse and resolve numerous differences between the parties. That involved interpretating the Sale and Purchase Agreement (SPA) and consistent application of accounting policies, including capitalised expenditure, impairment provisions and measuring accruals.
We reported our conclusion on each of the areas of difference, agreeing with the Buyer on some, the Seller on others, and neither on some. We came to completion net assets of £9.1million, giving a consideration adjustment of £0.1million.