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Navigating a Business Valuation where there could be evidence of narcisstic abuse in a relationship between the partners

Updated: Jun 8

Divorce and the family settlement legal process is an emotionally drainning process for anyone to say the least, but in cases where the relationship between partners may have elements of narcissistic abuse, the journey to a positive settlement is often filled with additional complexities that come with this type of a relationship. This is especially true when business valuations are involved, as the typical manipulation and deceit that can be characteristic of narcissistic abuse may significantly complicate matters. In Australia, where the legal system is not fully equipped to address the nuances of narcissism, victims must navigate these challenges with care. This blog explores some of the common symptoms of narcissism, its impact on family settlement and the associated business valuations, and the pros and cons of opting for a mediation versus hard divorce settlements.


What is Narcissism?


We often hear about this word thrown around and in most cases, there is no clinical confirmation of narcissim as there are many theories around this area and how it may be defined. However, generally Narcissism is a personality disorder often characterised by an inflated sense of self-importance, a deep need for admiration, and a lack of empathy for others. It typically exists on a spectrum that ranges from mild traits to full-blown Narcissistic Personality Disorder (NPD). There are two main types:


1. The Overt Narcissist: This form of narcissism displays a level of grandiosity, attention-seeking behaviors, and overt displays of arrogance and entitlement. This is more clear to someone who engages with the person on a regular basis and where the Overt Narcissist does not feel the need to mask or hide this behaviour. Hence one may tend to see increasingly become more evident over the years in a marriage or arrangement between partners.

2. The Covert Narcissist: This form of narcissism is more subtle and the Covert narcissists are less obvious. They often exhibit passive-aggressive behavior, a facade of humility, and a high degree of sensitivity to criticism.


Victims of narcissistic abuse often experience PTSD, trauma bonding, codependency, and isolation from family and friends. Their whole world become warped and they do not know who to trust anymore becuase those sacred boundaries that hold a person together has been trampled upon leaving them in a situation where they are emotionally scared. The worst part is that to an outsider, everything appears normal and unproblematic on the outside in terms of the marriage or the partnership agreement. In fact there could be more effort by the abuser to confuse observers or be even more cordial and polite to society. Often the abuser is supported by a network of similar disposition or vested interests and constantly learns and adapts from the victim based on their reaction in such a way as to mirror them giving the impression of being the victim. The psychological trauma can severely impact the ability of victims to participate in society as they used to previously and also in financial and other business valuations that concern them during a divorce or family settlement due to a sense of fear or foreboding.


The Impact of Narcissistic Abuse on Business Valuations


When a victim of narcissistic abuse is involved in a family settlement matter or partnership arrangement in business that includes business assets, several challenges arise:


1. The Manipulation of Financial Records: Narcissistic abusers may manipulate financial records to undervalue the business, making it difficult for the victim to receive a fair settlement. Some cases have been observed to have relevant financial information withheld.


2. Gaslighting and Coercion: Victims may be gaslighted into believing they deserve less or are incapable of managing the business. In a few cases, the victim have reported that they were denied money or earnings due to them in order to weaken them financially and also where their business reputations were slandered in order to keep them in weak position so that they are unable to earn well.


3. Isolation: Cases have been reported where the victim is isolated the victim from familiar support networks such as churches and family, leaving them ill-prepared to be in a proper emotional state to attend to the business valuation process and also the legal proceedings and the social life and acceptance they used to enjoy previously.


These factors underscore the importance of having a comprehensive strategy for business valuations that form part of the settlement process in a breakdown of the marriage or business partnership arrangement.


Mediation or Hard Divorce Settlement

In the Australian legal context, victims of narcissistic abuse have the option to choose between mediation and a hard divorce settlement. Each approach has its merits and drawbacks.


Mediation

Mediation involves a neutral third party to help both parties reach an agreement. For victims of narcissistic abuse, this can be a double-edged sword:


Pros:

- Less Adversarial: Mediation is less confrontational, which can be less traumatic for the victim. However most importantly a narcissist tends to take a confrontation very personal and may go to any length to destroy the person who confronts. As a result a softer approach preferably through a mediator may help make tremendous progress.

- Cost-Effective: Generally, mediation processes can be arranged over a fixed price basis and may be cheaper and faster than a court battle that may drag on and on.

- Control: The victim retains more control over the outcome.


Cons:

- Power Imbalance: The manipulative nature of the narcissist can dominate the mediation process.

- Lack of Protection: Without proper legal safeguards, the victim may be coerced into an unfair settlement.


Hard Divorce Settlement

This approach involves taking the case to court, where a judge will decide the outcome based on evidence presented.


Pros:

- Legal Protection: The court can provide a structured and legally binding resolution, which can prevent manipulation by the abuser.

- Fair Valuation: Judges can order forensic business valuers such as Samuel & Sonz Business Valuations and Accountants to ensure an accurate comprehensive business valuation.


Cons:

- Costly and Time-Consuming: Court battles are often lengthy and expensive.

- Stressful: The adversarial nature can be emotionally draining for the victim.


The Australian Legal System and Narcissistic Abuse

The Australian legal system is not equipped to handle the intricacies of narcissistic abuse which is understandable considering how complex an area this is and since we are an evidence based legal system. While there are laws in place to protect victims of domestic abuse, the covert and manipulative tactics of narcissistic abusers can be gray areas and are extremely difficcult to be managed by a legal system.


Moreover, the legal system or friends and family may not fully appreciate the psychological impact of PTSD, trauma bonding, and codependency that is exhibited by the victim and which negatively impacts on the victim's ability to participate in a legal process. This gap necessitates the involvement of specialized legal professionals and business valuers who understand the dynamics of narcissistic abuse and can navigate the process in an empathetic and professional manner.


Conclusion

Navigating business valuations during a family settlement matter where narcissistic abuse is involved requires a nuanced approach. Victims must weigh the benefits and drawbacks of mediation versus hard divorce settlements, keeping in mind the manipulative tendencies of the abuser and the limitations of the legal system. Ultimately, the choice should be guided by the specific circumstances of the case and the victim's emotional and financial well-being in order to obtain the best outcome for both parties.


For victims of narcissistic abuse, it is crucial to seek the support of professionals who understand the dynamics of this abuse. This includes not only legal advisors but also therapists and business accountants who can provide the necessary support and guidance throughout this complex process of family settlement and the business valuation process.


References

1. **American Psychiatric Association**. (2013). Diagnostic and Statistical Manual of Mental Disorders (5th ed.). Arlington, VA: American Psychiatric Publishing.

2. **Karpman, S. B.** (1968). Fairy tales and script drama analysis. Transactional Analysis Bulletin, 7(26), 39-43.

3. **Sharkey, P.** (2021). Trauma Bonding: Understanding and Overcoming the Trauma Bond in a Narcissistic Relationship. CreateSpace Independent Publishing Platform.

4. **Australian Institute of Family Studies**. (2020). Separation and Property Division in Australia. Retrieved from https://aifs.gov.au

5. **Domestic Violence Resource Centre Victoria**. (2022). Financial Abuse and Economic Control. Retrieved from https://dvrcv.org.au


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