Brexit and Bankruptcy

Posted on July 26 2016 by admin

How can a macro-economic event, such as when the United Kingdom voted to exit the European Union, impact everyday people and corporations and help them emerge from bankruptcy protection in the United States? When the UK voted to exit the EU, this caused a significant panic in the investment community, particularly investments in foreign stocks. When there are such uncertain times, investors have a tendency to liquidate their equity holdings, including riskier foreign stocks, and invest their money in less risky investments, such as U.S. Treasuries. As these large numbers of investors buy U.S. Treasuries, the prices increase and the rates of return decline. As the yields on the U.S. Treasuries decline, so do other interest rates.

One of the key issues for debtors trying to emerge from bankruptcy protection is how to restructure their secured debt; and, a key component is what a reasonable rate of return should be for the secured lenders. As market interest rates decline due to the declining U.S. Treasury rates, this can significantly lower the required monthly payments on the restructured debt and make the Debtor’s Plan of Reorganization more feasible. Thus, they have a better chance to emerge from bankruptcy protection.

By Ted Burr, CTP, CIRA

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Five Easy Changes to Create Value in Your Small Business

Posted on July 21 2016 by admin

A handful of questions to begin – Are you thinking of selling your small and medium-sized entity (“SME”)? Is your largest asset in your estate your business? Are you the CEO, CFO, general manager and sales force of your SME? Do you fear going on a two week vacation because of the number of phone calls you will receive from employees asking questions regarding operations? If you answered ‘yes’ to more than one of the questions above, these tips could help you add value to your SME before you sell your interest.

  1. Begin by documenting your daily responsibilities and put them each in a logical category. Next, begin to identify current activities for which you are responsible and can be delegated to other employees. Take time to train the employee and trust them to perform the work. Don’t forget to increase compensation in situations that warrant an increase.
  2. Begin to identify key personnel that if lost, revenue and earnings would be impacted. Once identified, begin to develop procedures or processes that introduce other employees into the process in order to reduce the impact if the key employee left your firm.
  3. Begin to maximize earnings instead of minimizing taxable income. Of course buyers can add back discretionary, non-operating expenses to the earnings stream when they analyze your business, but too many adjustments intuitively add risk to the SME and therefore, decrease the potential purchase price of the business.
  4. Start to develop new markets and/or new revenue streams in order to show growth in revenue. Buyers are looking for high growth companies to purchase or SME’s that outperform their peers regarding growth. All things being equal, higher growth companies receive higher purchase prices.
  5. Begin to forecast the next four quarters of revenue and expenses. Identify key performance indicators that will assist you in developing your revenue forecast. Maybe your industry correlates well with another industry. In that case, research both industries in order to gain an understanding of what the future holds for each industry. Be sure to compare actual results to forecasted results in order to improve your forecasting process. Many business owners have no vision of their future. At a minimum, creating a forecast will begin the thought process of how to improve marketing or operations to achieve the forecasted earnings.

Use these tips to your advantage.

By Michael R. Metzler, CPA/ABV, CMA, CGMA, ASA

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How Do You Not Notice $17 Million Missing?

Posted on July 12 2016 by admin

$16,764,128.95 – let’s think about that for a minute. Almost $17 million gone over a 9 year period – a mere $1.86 million per year. Would you notice?

That’s how much the former controller for the Collin Street Bakery in Corsicana, Texas embezzled from the business. He used his ill-gotten gains to finance a lavish lifestyle of new cars, furs, frequent travel on private jets and a collection of watches and jewelry estimated to be worth over $3 million.

Sandy Jenkins started as a payroll and accounts payable clerk at the bakery in 1998. Collin Street Bakery was known for making ”the Cadillac of fruitcakes” and was owned by one of the wealthiest families in Corsicana. By 2000 he had been promoted to controller. Sandy had always admired the finer things in life but struggled to obtain them on his $50,000 salary. He and his wife were contributing members of the community and had raised a daughter. But it was never quite enough for Sandy. He always dreamed of having more.

In December 2003, as Sandy sat in his office at the bakery, he started thinking about how he worked so hard for the bakery. But was he really fairly compensated for all his hard work? He started by taking a little petty cash. Not a lot but definitely enough that someone might notice. He was a little nervous at first but then nobody seemed to care. And the little bit of petty cash wasn’t enough.

Sandy began writing checks to pay his credit cards from the bakery checking account. He would write the check which was electronically signed by the system, print the check and then void the check in the system. He mailed the first check to his credit card company and then wrote a check to a bakery vendor for the same amount as the first check. The second check was never mailed. He was careful to time his big payments to coincide with typical periods of heavy purchases.

The Company owners and executives couldn’t figure out why they weren’t more profitable. They seemed to chalk it up to their expansion and the economy. They had performed audited inventories of their ingredients and audited payroll. They looked at their expenses, although apparently not too closely.

Nobody at the business or in the small town seemed to question how Mr. and Mrs. Jenkins could suddenly afford new cars and expensive jewelry. They did not hide their spending; in fact, some might argue that they flaunted it. Sandy would tell his boss that his cousin let him use his private jet or that a friend gave him a new watch for helping him out. But no amount of family or generous friends really explained the sudden wealth of the Jenkins.

Sandy Jenkins’ scheme was discovered by accident by a fairly new accounting clerk who happened to notice a check written to Capital One. She knew the bakery didn’t have any dealings with Capital One. When she asked Sandy about the check he replied that he would “fix it”. She was suspicious and did a little more digging. She found over $400,000 in checks written to vendors not used by the bakery in a relatively short period of time. Sandy Jenkins was fired the next day. He is currently serving a 10 year prison sentence. The contents of his home were auctioned off to help pay restitution. His wife was sentenced to 5 years of probation.

Sandy was a long term trusted employee who obviously knew no one was checking up on him. There were no checks and balances in place to catch his scheme. But there was also no awareness or thought of the possibility of fraud amongst the employees. If any were suspicious of his lifestyle, they never spoke up, including management. He had been living a lavish lifestyle on the bakery’s dime for almost nine years before he was caught. Don’t you think somebody should have said something?

By Melissa E. Loughlin-Sines, CPA, CFE, CVA, CFF, ABV

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Tax Court Differs on Treatment of Built-In Capital Gains

Posted on June 30 2016 by admin

When valuing a controlling or non-controlling interest in a C corporation that owns only marketable securities, a common method to apply is the net asset value method under the asset approach. Under this method, the fair market value of liabilities is subtracted from the fair market value of assets. Included in the liabilities is a dollar-for-dollar reduction on the date of valuation for the built-in capital gains (BICGs) tax.

The 5th and 11th Circuits have accepted a dollar-for-dollar reduction in value for the BICG tax for both a controlling interest and a non-controlling interest (See Dunn v. Commissioner, U.S. Court of Appeals 5th Circuit, No. 00-60614, and Estate of Frazier Jelke, III v. Commissioner 11th Circuit U.S. Court of Appeals, No. 05-15549). However, in the tax court case heard in the 3rd Circuit, Estate of Helen P. Richmond, Deceased, Amanda Zerbey, Executrix, Petitioner v. Commissioner of Internal Revenue, Respondent, T.C. Memo 2014-26 (Richmond Case), this approach was not applied.

In the Richmond Case, the subject interest was a 23.44% non-controlling common stock interest in Pearson Holding Company, a family owned C corporation that held primarily marketable securities with significant built-in capital gains. The court record established that 87.50% of the $52 million market value of assets represented appreciation that, if triggered by a sale, would result in capital gains tax of approximately $18 million.

The estate’s expert relied on the income approach, whereas the IRS expert relied on the asset approach. Mr. Thompson, the IRS expert, quantified the BICG tax exposure by increasing the marketability discount by 15% based on his analysis of closed-end funds. Interestingly, the tax court criticized Mr. Thompson for his tax methodology and analysis but accepted his conclusion of the tax amount, which was approximately $7.8 million. This is about 43% of the full $18.1 million tax had the portfolio been liquidated, or had the dollar-for-dollar reduction in value been applied.

The court justified its $7.8 million reduction in value by performing a present value calculation of the full capital gain tax assuming it would be incurred ratably over a 20-year and 30-year period. They used this as a proxy for the portfolio turnover rate. They calculated a range of present values for the BICG tax, from $7.5 million to $9.5 million using discount rates ranging from 7.0% to 10.27%, and concluded that $7.8 million was “reasonable in this case”.

This is a disappointing ruling given the 5th and 11th Circuits’ dollar-for-dollar reduction in value rulings in other BICG tax cases using the net asset value method. The expectation is for consistency in the tax court that results in logical and reasonable conclusions. This decision, however, just muddies the waters.

By Cindy Andresen, ASA

Source: Business Valuation Review, Volume 34, Issue 3, Fall 2015, “Thoughts on Estate of Richmond Tax Court Case” by John M. Byrne, CPA/ABV

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Number of AZ Real Estate Appraisers Could Decrease

Posted on June 15 2016 by admin

The number of Arizona real estate appraisers could decrease at a rate of 3% per year over the next decade.

According to the Appraisal Institute, the pool of real estate appraisers in the United States is shrinking and aging. Sixty-two percent of appraisers are 51 and older while 24% are between 36 and 50. Only 13% are 35 and younger. The Appraisal Institute believes the number of appraisers could fall 3% per year over the next decade

Below is information and statistics which will give insight into the real estate appraisal industry and some of the factors causing the number of appraisers to decrease.

Are there different types of real estate appraisers?

Certified Residential Appraiser

The State of Arizona permits Certified Residential Appraisers to appraise one to four residential units (single family residence, duplex, threeplex or fourplex) without regard to value or complexity of the appraisal, but does not allow them to appraise residential subdivisions.

Certified General Real Estate Appraiser

The State of Arizona permits Certified General Real Estate Appraisers to appraise all types of real property.

Licensed Residential Real Estate Appraiser

The State of Arizona permits Licensed Residential Real Estate Appraisers to appraise non-complex one to four residential units having a transaction value of less than $1,000,000 but does not allow them to appraise residential subdivisions.

What requirements must be fulfilled in order to become a certified or licensed real estate appraiser?

Table 1


What is the education level of real estate appraisers in the United States?

Table 2





How many real estate appraisers are there in the United States?

Table 3




How many real estate appraisers are there in Arizona? (4)

Table 4



What is the gender of U.S. real estate appraisers?

Table 5



What is the annual income of U.S. real estate appraisers?

Table 6




What factors are causing the number of real estate appraisers to shrink?

According to industry experts, the following dynamics are contributing to the decreased number of appraisers:

  • Appraisal fees are decreasing or stagnant. Since many appraisers are employees and split commissions with their employers, they are apprehensive about the ability to increase their earnings in the future.
  • Prior to 1991, when Arizona state licensing began, anyone could hold themselves out to be a qualified real estate appraiser. The licensing process is considered by some to be too rigorous and time consuming.
  • Entry level employees are sometimes reluctant to pursue a career in an industry that requires 2,000 to 3,000 training hours.
  • Owners of real estate appraisal firms are sometimes reluctant to hire new employees because the training process mitigates their productivity.

If you have any questions about the profession of real estate appraisal, please contact Gary Ringel, Certified General Real Estate Appraiser and Director of Henry & Horne’s Real Estate Appraisal & Consulting Group at (480) 624-2961.

By Gary Ringel, CGREA

(1) Thirty semester hours of college-level education from an accredited college, junior college, community college or an Associate’s degree or higher (in any field).

(2) 1,500 of the 3,000 hours must be nonresidential appraisals.

(3) According to the Department of Financial Institutions Real Estate Appraisal Division (formerly the Arizona Board of Appraisal), the length of the state examinations may change sometime in 2016.

(4) Source is Numbers are as of May 9, 2016.




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When Does Computer Fraud Occur?

Posted on May 31 2016 by admin

Most information in organizations is now created, managed, and stored electronically, which has caused an increase in the rate of computer-related criminal activity. There are four situations in which a computer device may be involved in a crime: when the computer is (1) the target of the crime, (2) the medium through which the crime is committed, (3) incidental to the commission of the crime, or (4) a combination of the previous three

Even law enforcement organizations are not immune to computer security issues, as evidenced by a recent breach within a U.S. Metropolitan Police Department . A civilian employee of the department, we will call her Martha, recently pled guilty to two counts of obtaining information from a protected computer for a fraudulent purpose. Martha used her position as a community service officer to access databases, including the National Crime Information Center (NCIC) computerized index, which contained the personally identifiable information (PII) of millions of individuals. Martha obtained PII on at least ten occasions between 2009 and 2014, then provided that information to a friend, whom we will call Sally. Sally used the PII to file fraudulent federal income tax returns and erroneously claim tax refunds. Once Sally received the refunds, she and Martha shared the proceeds. Sally pled guilty in a separate case, and was sentenced to twelve years in federal prison. Martha was recently sentenced to two years in prison and she must pay restitution of $166,026.

This breach event is an example of an employee using her authorized access to obtain protected data for personal use. This type of computer fraud can be difficult to detect because the employee accesses the protected information in the normal course of their job. One way to detect this type of misuse is to review logs of the employee’s computer activity. Some red flags to look for are: (1) is information accessed during a time the employee should not be working (i.e. before/after hours), (2) is information being printed, emailed, or saved to a flash drive (i.e. becoming portable), or (3) is information accessed excessively related to other employees in the same position?

Because most information in organizations is created, managed, and stored electronically, companies are more vulnerable to cyber-crime and may require a reevaluation of internal controls around electronic data. Security breaches can be very costly to an organization, not only in lost data but also to a company’s goodwill. In addition, securing data is not just a matter of taking measures within the IT system such as encryption. It also includes physical security, proper screening of potential employees, adequate training and supervision of current staff, and development of preventative, detective, and corrective measures. Security must be an organization wide priority, so it is vital that management is involved in every step of the process.

By Shyla A. Ingram, MSA

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Vacancy Rate for Greater Phoenix Industrial Market Decreases in 2015

Posted on April 12 2016 by admin

Fourth Quarter 2015 Stats Bode Well For Industrial Properties in Greater Phoenix


  • 1.4 million square feet of space was absorbed in the fourth quarter of 2015 (Q4) which impressively was the 23rd consecutive quarter of positive absorption in the Greater Phoenix industrial market.
  •  Net positive absorption for industrial space in 2015 was almost 8.5 million sq. ft. Most of the absorption gain was concentrated in build-to-suits, owner-built, and second generation space. (*)


  • Vacancy declined to 10.3% in Q4, a notable decrease over 11.1% in the third quarter of 2015 and 11.4% in the fourth quarter of 2014. This reduction is particularly encouraging when you consider that the vacancy rate hovered between 11% and 12% during the prior six quarters. In fact, Q4 marked the first time since 2007 that the industrial vacancy rate in Greater Phoenix fell below 11%.

Asking Rental Rates

  • The average monthly asking rental rate inched up a penny in Q4 to $0.52 per square foot on a monthly triple net basis.

Cap Rates

  • Cap rates averaged 7.5% in Q4 and were 7.6% for all of 2015.

The charts below present Cushman & Wakefield’s statistical data in the fourth quarter of 2015 for all classes of industrial space in Metro Phoenix related to total buildings, inventory, vacancy rates, net absorption, square feet under construction, and average rental rates. Note that net positive absorption in the Southwest Phoenix submarket accounted for 29% of the 4,027,249 square feet sold in Metro Phoenix in Q4 but its vacancy rate of 14.3% was the highest of any of the 17 submarkets in the Cushman & Wakefield study.

Real Estate Charts


The Experts Are Forecasting Another Good Year for the Phoenix Industrial Market in 2016

  • According to Collier’s International, “Vacancy in Greater Phoenix industrial properties will continue to trend lower in 2016, with net absorption outpacing deliveries of new space by approximately 1 million square feet. The vacancy rate should end 2016 in the low-to-mid 10 percent range.”
  • In regard to asking rents, Colliers International opines “Tenant demand for industrial space is strong and vacancy is improving, which should continue to push rents higher in 2016. Average asking rents are forecast to increase by more than 4 percent in 2016.”
  • CBRE believes investor interest in Metro Phoenix warehouse and distributing facilities will remain strong in 2016 and recommends purchases of industrial properties along transportation corridors to enable online retailers to provide same day delivery to customers.

Employment and Population Growth Should Create Demand for Industrial Properties in 2016

  • In October of 2015, Forbes Magazine named Arizona the best state for future job growth, projecting 3.1% growth through 2019.
  • In a September 2015 report on the technology industry in the United States, CBRE ranks Phoenix and San Francisco tied for number one in technology job growth nationwide.
  • The University of Arizona estimates that Metro Phoenix experienced a net migration increase of 12.1% in 2015 and forecasts net migration increases of 17.5% and 22.1% respectively in 2016 and 2017.

Do you recall your Economics 101 professor hypothesizing that job and population growth will almost always stimulate demand for real estate? As this theory pertains to the industrial market in Greater Phoenix, your instructor was correct as long as absorption outpaces new construction.

By Gary Ringel, CGREA


The primary sources for information in this article are the Greater Phoenix/Industrial 4Q 2015 Research & Forecast Report published by Colliers International; the Phoenix Industrial, Q4 2015 Marketview published by CBRE; and the Industrial Snapshot Q4 2015 MarketBeat published by Cushman & Wakefield.

(*) Second generation space is industrial space occupied by a prior tenant that has been improved and rented to a subsequent tenant.

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Can You Limit ERISA/Pension Fund Withdrawal Liability?

Posted on April 5 2016 by admin

It’s no secret that pension plans around the country are in trouble. The financial crisis of recent years has not only affected the value of securities and other investments, but has contributed to the failure of key businesses, and has caused many pension plans to become underfunded. What may come as a surprise to contributing employers of multiemployer pension plans is how an underfunded pension plan could have a significant impact on their business upon withdrawal from the plan. Employers need to know what the withdrawal liability is and how to identify and potentially minimize its financial consequences.

In September 1980, Congress enacted the Multi-Employer Pension Plan Amendments Act (“MPPAA”) which, among other things, required plan trustees to collect a “withdrawal liability” from employers withdrawing from an MPP. Any significant reduction in the employer’s duty to contribute – including layoffs, plant closures, sales or changes in the collective bargaining agreement – can trigger a complete or partial withdrawal from a plan, resulting in a withdrawal liability.

In general, the amount of withdrawal liability is the employer’s proportionate share of the plan’s unfunded vested liabilities, as determined under a statutory formula. Upon withdrawal, the plan determines the amount of the liability, notifies the employer of the amount, and collects that amount from the employer. A withdrawing employer may be required to pay the liability even if its employees are not entitled to benefits, or even if employees are immediately hired by another contributing employer that will continue to fund their benefits.

While the withdrawal liability itself may not be avoidable, there are situations where the amount due can be significantly reduced. Under ERISA Section 4225, 29 U.S.C.A. § 1405, an employer who withdraws due to the sale of assets, or an insolvent employer undergoing liquidation or dissolution, can potentially limit the amount of unfunded vested benefits allocable to them.

An employer who withdraws may be able to reduce the withdrawal liability, and a major factor in calculating the maximum liability is the “liquidation or dissolution” value. However, the “net book value” or “equity” reported on a company’s balance sheet rarely represents its liquidation value. Various adjustments typically must be made to book value, including restating the book value of tangible and intangible assets to estimated realizable value in liquidation, reductions for the cost of liquidating inventory and other assets, reductions for uncollectible accounts receivable, consideration of ongoing expenses that will be incurred during the liquidation period, etc. Considering the potentially significant financial burden as a result of an employer’s withdrawal from an MPP, which possibly could extend to related entities as well, it is recommended that a company facing such a liability obtain expert assistance in determining its liquidation value and calculating its maximum withdrawal liability. And of course, since the rules governing withdrawal liability are complicated, companies with specific issues and concerns should consult with legal counsel.

By Ted Burr, CTP, CIRA

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The Fraud Triangle

Posted on March 15 2016 by admin

In order for fraud to occur, there normally needs to be three conditions present: a pressure, an opportunity and a rationalization. This is known as the fraud triangle.

The first side of the fraud triangle is pressure. Pressure can take many forms, and the pressures that motivate employee fraud differ from those that motivate management fraud. Pressures on employees most often include financial, emotional and lifestyle.

  • Financial pressures may be high personal debt/expenses, heavy financial losses, tax avoidance and “inadequate” salary/income.
  • Emotional pressures include job dissatisfaction, coercion by management, fear of losing one’s job and the need for power or control.
  • Lifestyle pressures include addictions such as gambling, drugs, or alcohol; and family/peer pressure. It is important to note that lifestyle pressures do not necessarily exist in the person committing the fraud but may be found in a spouse, romantic partner, or other family member.

Some red flags that may be found in employees experiencing pressure are living beyond one’s means, recent acquisition of high dollar assets such as a sports car or boat, refusal to share job duties, reluctance to take time off, expression of bitterness over a missed promotion or pay raise, radical changes in behavior and/or appearance, sudden decline in performance, and sudden attendance issues. Organizational pressures on management, which often inspire financial statement fraud, include management characteristics, industry conditions and financial pressure.

The second side of the fraud triangle is rationalization. Rationalization provides the justification for committing fraud, and can take three forms, a justification, an attitude or a lack of personal integrity. Joseph Heath, a philosophy professor at the University of Toronto (U of T), and the former director of the U of T Centre for Ethics, suggests that there are seven rationalizations for unethical actions (*):

  • Denial of responsibility
  • Denial of injury
  • Denial of the victim
  • Condemnation of the condemners
  • Appeal to higher loyalties
  • Everyone else is doing it
  • Entitlement

The final side of the fraud triangle is opportunity. Opportunity is the condition or situation that allows an individual to commit fraud, conceal fraud, and convert the theft or misrepresentation to personal gain. This side of the fraud triangle is the easiest for organizations to address through the design, implementation and enforcement of internal controls. Some examples of controls include segregation of duties, authorization procedures, proper supervision, safeguarding of assets, clear lines of authority, adequate documentation and independent checks on performance.

In discussing the fraud triangle, and the motivations for fraud, it is also important to keep Maslow’s Hierarchy of Needs in mind, as this may provide additional insight into fraudster motivations and potential vulnerabilities. For example, an individual may be motivated by the need for money to maintain their family (a physiological need), and by job security (a safety need). An individual may also be susceptible to management coercion because they want to be seen as a worthy employee (a love, affinity need/an esteem/respect need). Individuals who commit fraud may be subject to the influence of needs along all levels of Maslow’s Hierarchy.

By Shyla A. Ingram, MSA

(*) Brooks, L.J., & Dunn, P. (2010). Business & professional ethics for directors, executives & accountants (6th ed.). Mason, OH: South-Western

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The Amazing Court Reporters

Posted on March 8 2016 by admin

dI have testified at dozens of depositions and always had a court reporter present to transcribe my testimony. In my earlier days of testifying in a courtroom, a court reporter was always present. Today, court reporters in the courtroom are a rare sight. The courtrooms in Maricopa County Arizona Superior Court, for example, generally use microphones for the judges, attorneys and witnesses. Testimony is electronically transcribed. The words spoken in the courtroom are now recorded on discs.
Whenever I’ve given a deposition, I am always amazed and impressed at how effortlessly the court reporters restate my testimony on those little typewriter-thingy machines they peck away at. Oh, alright, I looked up the official name of the gadgets and found they seemed to be called stenographs, or stenography machines. Whatever they are called, it takes a skilled court reporter to make them hum.

I look with wonder at the court reporters – mostly ladies but sometimes men, and how their nimble fingers fly as I am spouting off whatever it is that I’m testifying about. I am thinking there is no possible way the reporter could type all that I just said and have it come out in some intelligible written document later on. No way. Yet, in the end, their wonderfully assembled written reports had – what I thought was said too quickly, accurately transcribed.

I’ve also found, for some reason unknown to me, the reporters are always courteous and friendly. In other words, they never appear to get rattled or allow themselves to be jaundiced by the high emotions and sometimes caustic and hurtful remarks from both the witness being deposed as well as the opposing attorney asking the questions. I had one court reporter tell me one time that he was transcribing at a deposition when the witness, an elderly gent in his early 80s, decided he’d had enough of the perceived badgering by the opposing questioning attorney. He suddenly reached for the pitcher of ice water on the middle of the conference room table and tossed its contents onto the befuddled and stunned said questioning attorney. I wonder how the court reporter accounted for this in his transcript. I thought it must have gone something like this:

Q. So you admit that it was a very unreasonable – strike that; a very dumb – strike that; a very stupid thing you chose to do. Isn’t that right Mr. Kruft?

A. Why you dirty #@!%&*! I’ll show you who’s stupid.

Next, I wondered how the court reporter would make written note of what he’d just witnessed. Surely, this event was so significant that it had to, somehow, be noted in the old guy’s deposition. I thought the ice water incident might have been recorded by the court reporter something like this:

(The witness suddenly picks up the pitcher of ice cold water, with several ice cubes in it, which was sitting in the middle of the conference room table, and slings it all over Mr. Ames. A short recess is taken.)

I’ve found court reporters to be unflappable, even when catastrophe strikes them during a deposition. I remember once when I was testifying and the court reporter, who was sitting to my left, placed a glass of water on the conference room table in front of her. The water happened to be right in front of, and above, her stenograph machine and a laptop computer which was storing the court reporter’s typing. I thought to myself, “Uh-oh, this doesn’t look good.” Sure enough, the reporter rose from her chair and reached to pick up a document on the conference room table. The document was to be marked by the reporter as an exhibit to my testimony. As the court reporter attempted to sit down – you guessed it – her left hand caught the glass of water. It spilled onto the conference room table. It spilled onto her stenograph machine. And, it spilled onto the laptop. A short recess was taken. The reporter calmly called her office which, fortunately, was not too far from my deposition location and asked a colleague to bring a backup stenograph machine and laptop. Within 20 minutes the new equipment arrived and my deposition continued. The reporter remained calm and upbeat. I was impressed.

In closing, I tip my hat to court reporters. They are truly amazing people. And that’s the truth!

By Don Bays, CPA, ABV, CVA, CFF

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