• Matt Turetsky

An approach to agreeing on value in business and property disputes

When cases I mediate involve the division of disputed interests in business, land or other property of value, there is a method I occasionally use which has worked in a surprising number of cases. I ask one or both parties to make an offer to buy or sell the disputed property for the same price.

For example, in a relatively close adverse possession case in which the disputed portion of land is known, I will ask one side to offer to buy the disputed land or sell the disputed land to the opposing party for the same price. Or, if the parties are partial owners of a business in which their relationship has soured, I ask them to offer to buy out their partner for the same price per share that they would also be willing to sell their interest. This has worked nearly every time and one of the two offers has been accepted.

The most obvious reason this works is because a party is forced to realistically assess the property’s value, rather than inflate or deflate the value if they are only considering buying or selling, not both. The other reason it works is because the party making the offers usually has a preference for buying or selling, so they skew the number ever so slightly to entice the other side to buy or sell. In other words, they make a better offer than they might have made if the parties were only talking about the one alternative. I liken the strategy to the standard approach of dividing cake between two children where one kid cuts the cake and the other chooses the piece. I encourage you to try this approach that doesn’t even require a mediator.