Company Valuations & Deferred Consideration
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Company Valuations And The Status of Deferred Consideration
Following from my previous blog I wanted to discuss the very important topic of Company valuations and the status of deferred consideration.
The financial remedies team at Osbornes Law often represent clients where significant corporate assets and other capital assets are in dispute.
Valuing a company can be highly challenging for lawyers for several reasons. It is not an exact science by any means, and there may be many complex factors at play.
Two key issues were disputed in a recent case (Rosemin-Culligan v Culligan [2025] EWFC): the valuation of company shares and whether a future payment following the company sale constituted deferred consideration for the transaction.
What’s the background?
Diane Rosemin-Culligan (founder of the London City Lionesses) and Anthony Culligan married in 1992. Mrs Rosemin-Culligan, who is British, started divorce proceedings in April 2022. Mr Culligan is a dual British and US citizen and worked in the finance sector.
In 2012, Mr Culligan invested £10,000 in Bitcoin and, by 2017, it was worth a staggering £20m. Over the years he sold off the Bitcoin to provide financial support for other projects, including his own company (SETL) and Mrs Rosemin-Culligan’s company (ELSA).
The subsequent sales of those two companies by the respective parties led to them accusing each other of non-disclosure and misconduct.
SETL
In 2023, financial services platform Colendi acquired SETL’s entire share capital in return for SETL shareholders receiving 8% of Colendi’s share capital. Mr Culligan received 3.6% of the share capital (the shares were illiquid).
The court noted that valuations of shares in private companies present challenges and resulting valuations can be “fragile”. Valuation is a subjective task and, stressed the judge, the conclusions to be drawn by the court as to value must have regard to the facts of the particular case.
On the facts in this case, the judge accepted an expert valuation of Mr Culligan’s shareholding of £19m. He agreed with the expert’s opinion that he had included a discount for the illiquidity of the shares and a further discount was not appropriate.
ELSA
In December 2023, Mrs Rosemin-Culligan sold her company and negotiated a consultancy agreement by which she would have an annual fee of £750,000 for four years. The issue was whether her consultancy fee amounted to deferred consideration for the sale of ELSA. If so, the total sum of £3m could potentially be included in the matrimonial assets and available for division.
Looking at the totality of the evidence, the court decided that the consultancy fee did constitute deferred consideration for the sale. For example, Mrs Rosemin-Culligan had shown “marked reluctance” to provide information about the sale negotiations; she had not produced documents to satisfy the court that the consultancy fee did not amount to deferred consideration; and she was under no obligation to offer to ELSA opportunities through which she could perform her tasks under the agreement.
The court ordered that £750,000 of the deferred consideration for the sale of ELSA was to be shared equally between the parties.
As for the Colendi shares, Mr Culligan was ordered to transfer to his ex-wife 30% net of the future benefits derived from the shares (followed by a clean break). This was to take the form of undertakings, contingent lump sums and backed up by a phantom share agreement.
An equal pension-sharing order was also made in respect of Mr Culligan’s pension; and his US tax liabilities were to be borne equally between the parties. Mr Culligan was also ordered to pay £350,00 towards his ex-wife’s legal costs.
How we can help
The team at Osbornes Law regularly represents high net worth individuals in financial proceedings where difficult issues arise in relation to company assets.
For expert support, contact the leading divorce partner Yael Selig, or contact us by:
- Filling in our online enquiry form; or
- Calling us on 020 7485 8811
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