Business Valuation for Partnership Disputes/Shareholder Disputes/Director Disputes “Fair Market Value” in Red Deer, Alberta

Business Valuation for Partnership Disputes / Shareholder Disputes / Director Disputes “Fair Market Value”

Appendix: Bibliography of Authority Regarding the Identification and Valuation of Intangible Assets

The following independent global institutions provide the empirical basis for the 68% Intangible Asset Midpoint used in this forensic valuation. These sources suggest that legacy accounting models (Market, Asset, and Income approaches) systematically fail to identify the majority of modern property value.

The Scale of Global Assets and the Missing Majority

• Courts assessing fair market value must first understand the scale and composition of modern global assets.
• Independent sources place total global assets (tangible and intangible combined) in a range exceeding USD $500 trillion, including real estate, infrastructure, machinery, financial capital, IP, systems, data, brands, contractual rights, and institutional know-how.
• Composition matters more than the headline number: empirical studies consistently show roughly 65%–75% of global asset value is intangible, with 68% as a commonly cited midpoint.
• In the 1970s, tangibles dominated enterprise value.
• In 2026, intangibles are the value.

Why Traditional Valuation Approaches Systematically Miss the 68%

• Valuators often rely on Market, Asset, and Income approaches built for an era when physical capital dominated.
• These approaches are financially descriptive, not forensically diagnostic: they do not identify why earnings exist, whether they are fragile, or what it would cost to rebuild them.

Failure Modes of the “Big Three” Approaches

• Market approach: Depends on comparable sale prices that often conflict with the “without compulsion to buy or sell” requirement of fair market value.
• Asset approach: Measures what can be touched and depreciated, but cannot identify proprietary systems, operational intelligence, customer trust, data rights, or embedded process advantages.
• Income approach: Projects historical earnings without testing what causes them, how fragile they are, or the cost to rebuild them if disrupted.

As a result, intangible assets are ignored, collapsed into residual goodwill, or omitted entirely. When 68% of value is missing, the result is not conservative. It is flawed.

Forensic Valuation Requires Identification Before Quantification

• Intangible assets cannot be valued by assumption.
• They must be identified, measured, weighed, and stress-tested.
• This is the function of the proprietary 25 Factors Affecting Business Valuation together with the 5 Senses Inspection Report, designed to bridge accounting outputs and economic reality.

This is not guesswork. It is evidence.

Experience Is Not Optional: It Is Biological

• Modern forensic valuation requires experienced expert judgment beyond formulas.
• Peer-reviewed work in neuroscience and other high-stakes fields describes the Gut-Brain Axis as a validated second decision system developed through long-term, hands-on experience.
• A valuator who has never owned and operated a business may lack the practical pattern recognition required to detect fragile intangible value.
• The methodology merges structured forensic factors with expert judgment to produce conclusions that are explainable, testable, and defensible under cross-examination.

The Evidentiary Consequence in Partnership Disputes

• A valuation that cannot identify and value the intangible core of a business raises a legal, not academic, issue.
• If the majority of the owner’s property is not identified and valued, the fair market value requirement is not satisfied.
• Courts require expert evidence precisely where the explanation behind the number is missing.

The Failure of the “Big Three” Approaches: Disruption Examples

• Legacy currency vs. Bitcoin: Traditional approaches showed $0; forensic analysis identifies the intangible core in the ledger/network.
• Blockbuster vs. Netflix: Traditional models valued stores and inventory, missing the shift to digital delivery systems.
• Kodak vs. digital photography: Comparables created a “circle of obsolescence”; forensic risk analysis would flag stranded hard assets.
• Britannica vs. Wikipedia: Tangibles and legacy sales projections missed the value shift to real-time data access networks.
• Taxis vs. Uber/Lyft: Physical medallions lost value when platform trust and delivery systems emerged.
• Travel agents vs. Expedia/Airbnb: Once consumers controlled the data, the intermediary’s intangible value vanished.
• Borders vs. Amazon: Retail footprint became overhead as logistics and data-driven delivery became the core.
• Fixed-line phones vs. Skype/WhatsApp: Value resides in connectivity, not cable.
• Incandescent bulbs vs. LEDs: Long-life semiconductor products destroyed recurring replacement economics.
• Banks vs. fintech: Branches became friction while value shifted to transaction velocity and algorithmic trust.
• ICE automakers vs. Tesla: Traditional “iron” valuation missed software-defined core and proprietary data/IP.

Exhibit A: The Anatomy of a Valuation Failure in Expropriation

A True Story of the “Missing 68%”

• A family-run convenience store appeared to be a simple retail lease on paper, but a 5-Senses Inspection revealed a long-built intangible fortress.
• Legacy offer: $100,000. Forensic valuation using the 25 Factors: $528,000.

Why the Big Three Approaches Failed

• Asset approach failure: Inventory without a location-dependent monopoly is not an asset; it can become a storage liability.
• Income approach failure: Tax-history snapshots missed planned expansion and the infrastructure for new revenue streams.
• Market approach failure: Compulsion undermines fair market value; coerced timelines void comparability.

The Biological Verdict: Why the City “Couldn’t See” the Value

• Spreadsheet-only appraisal misses on-the-ground operational reality.
• The inspection identified:

1. 30 years of localized data (Factor #15)
2. A strategic leasehold stronghold (Factor #8)
3. A high-velocity expansion model (Factor #22)

The result: The owner accepted $100,000 to avoid bankruptcy. The legal issue was evidentiary blindness: a method that cannot identify the true revenue drivers cannot make the owner whole.

The Death of Asset, Market, and Income Approaches: 4 Professional Paradigm Shifts

• Rules of Thumb → Stress Testing: Identify invisible fractures in the intangible core.
• Square Footage → Forensic Modeling: Value the forensic cost to rebuild the revenue stream.
• Eyewitnesses → DNA: Replace subjective multiples with operational “DNA proof.”
• Sampling → Total Oversight: Move from year-old samples to full operational examination.

The Biological Defense: The Gut-Brain Axis

Expert intuition in complex systems is supported by research across high-stakes disciplines.

The methodology merges validated instinct with structured forensic factors for explainable, testable conclusions.

“We present the impartial facts to the court so that an expropriation client can be made whole exactly as the law intended.”

Our Disruption Is Not the First in History and Change Is Often Slow

• Medicine: Monopoly models gave way to evidence-based and forensic diagnostics as superior methods proved outcomes.
• Pharmaceutical pricing: Patent monopolies eroded as generics and value-based models used better methods and data.
• Telecommunications: A regulated monopoly fractured under antitrust action and superior technologies.
• Parallel: Standardized accounting valuation can hide intangibles; forensic approaches force transparency and gradually gain acceptance case-by-case as evidence proves superior results.

Partnership Disputes in Alberta (Red Deer)

Partnership disputes in Alberta arise when partners can no longer operate together and lack an effective contractual exit mechanism. Governed by Alberta’s Partnership Act (RSA 2000, c. P-3), these disputes frequently result in dissolution or forced buyouts, making valuation necessary to determine each partner’s economic entitlement.

From a valuation perspective, partnership disputes are remedial rather than transactional, requiring analysis of capital accounts, undistributed profits, undistributed liabilities, and goodwill to fairly allocate value when the relationship breaks down.

1. Corporate Disputes Shareholders and Directors

Where a business in Alberta is incorporated, disputes are governed primarily by the Alberta Business Corporations Act (ABCA) not the federal Canada Business Corporations Act (CBCA) unless the corporation is federally incorporated.

A. Statutory Framework

• The ABCA governs corporate governance, shareholder rights, and director duties in Alberta.
• It regulates shareholder voting rights, meetings, disclosure, and access to records.
• Directors owe fiduciary duties and duties of care to act honestly, in good faith, and in the best interests of the corporation.

B. Common Types of Shareholder / Director Disputes

Typical disputes include:

• Disagreements over management or strategic direction
• Allegations of director mismanagement or breach of fiduciary duty
• Majority vs minority shareholder conflicts
• Denial of access to financial or corporate records
• Dividend and compensation disputes
• Deadlock between equal shareholder-directors

C. Key Legal Remedies

Alberta law provides powerful remedies for shareholders facing unfair conduct:

▪ Oppression Remedy

• A strong statutory remedy under the ABCA
• Available where conduct is oppressive, unfairly prejudicial, or unfairly disregards a shareholder’s interests
• Courts have broad discretion to order remedies, including:
• Buy-outs at fair value
• Changes to corporate governance
• Compensation or restitution
• Commonly used in Alberta to protect minority shareholders

▪ Derivative Actions

• Shareholders may bring actions on behalf of the corporation where directors refuse to act
• Any recovery belongs to the corporation, not the individual shareholder
• Supported by statutory and common-law principles

▪ Deadlock and Governance Failures

• Where decision-makers are at an impasse, Alberta courts may order:
• Forced buyouts
• Judicial dissolution
• Corporate restructuring
• Enforcement of dispute-resolution provisions in shareholder agreements
• These remedies exist to prevent paralysis where corporate governance breaks down.

2. Director vs. Shareholder Disputes

Although shareholders own the corporation, directors manage it. Conflicts arise where:

• Shareholders allege misuse of director authority
• Directors pursue strategies contrary to shareholder expectations
• Director actions are challenged as breaches of fiduciary duty

In such cases:

• Directors may face personal liability
• Courts may grant injunctions, reverse improper decisions, or compel statutory compliance

3. Unincorporated Businesses & Partnerships Partnership Act (Alberta)

Where a business is not incorporated and operates as a partnership, the governing statute is Alberta’s Partnership Act.

A. What the Partnership Act Covers

• In the absence of a written partnership agreement, the Act provides default rules, including:
• Equal sharing of profits and losses
• Equal management rights
• Full disclosure and accounting obligations
• Restrictions on expelling partners
• Fiduciary duties (including duties of loyalty and non-competition)
• Statutory dissolution triggers (death, insolvency, notice)

B. Dispute Types and Resolutions

Partnership disputes commonly arise over:

• Business direction and control
• Capital contributions and withdrawals
• Profit distribution
• Management authority
• Partner exit or expulsion
• Dissolution of the partnership

Resolution mechanisms include:

• Reliance on the partnership agreement (if any)
• Negotiation or mediation
• Court applications for:
• Accounting
• Enforcement of fiduciary duties
• Dissolution and winding up

Alberta courts may dissolve a partnership where:

• There is persistent deadlock
• Fiduciary breaches occur
• Continued operation is impracticable or unjust

4. Practical Dispute Resolution Pathways

Across corporate and partnership disputes in Alberta, the practical continuum is:

1. Governance Documents First
• Shareholder agreements
• Partnership agreements
• Articles and bylaws
• Well-drafted documents often prevent litigation.
2. Alternative Dispute Resolution
• Mediation and arbitration are strongly encouraged
• Faster and less costly than trials
3. Court Action
• Courts enforce statutory rights and fiduciary obligations
• Remedies include:
• Injunctions
• Valuation-based buyouts
• Dissolution
• Fiduciary damages

Summary How Alberta Law Handles These Disputes

• Corporation (Alberta)
  • Governing Legislation: Alberta Business Corporations Act (ABCA)
  • Jurisdiction: Provincial (Alberta)
• Corporation (Federal)
  • Governing Legislation: Canada Business Corporations Act (CBCA)
  • Jurisdiction: Federal
• General Partnership
  • Governing Legislation: Partnership Act (Alberta)
  • Jurisdiction: Provincial (Alberta)
• Limited Partnership
  • Governing Legislation: Partnership Act (Alberta) and related regulations
  • Jurisdiction: Provincial (Alberta)
• Sole Proprietorship
  • Governing Framework: Alberta business name registration regime
  • Jurisdiction: Provincial (Alberta)
• Co-operative
  • Governing Legislation: Canada Cooperatives Act (or applicable provincial statute)
  • Jurisdiction: Federal or Provincial

Note: This summary is for general informational purposes and does not constitute legal advice.