Demystifying Valuation, Economic Damages + Forensic Accounting

Income Statements in Real Estate Appraisals and Business Appraisals

When reading business and real estate appraisals, one should recognize that a business appraiser and real estate appraiser do not rely on the same items of income and expenses when determining market value.  For example, when valuing an LLC that owns a multi-tenant office building, the real estate appraisal only considers income and expenses directly …

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Preference Analysis – The Pillowtex Decision

On April 14, 2010, Judge Kevin J. Carey, Chief Judge of the United States Bankruptcy Court for the District of Delaware, issued a decision in the Pillowtex bankruptcy case that has significant implications with respect to the ordinary course of business (“OCB”) defense. Pillowtex filed for bankruptcy prior to the 2005 expansion of the preference …

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Ponzi schemes: an overview

Often, when people find out I am a forensic accountant, they will ask me about widely publicized cases involving fraudsters, such as Bernie Madoff, who is currently serving a 150 year sentence in prison for orchestrating a multi-billion dollar Ponzi scheme. During 2010, the SEC filed forty-seven enforcement actions involving Ponzi schemes. Sometimes I am …

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Discounts in Marital Dissolution Business Valuations – To Discount or Not

After 15 years of marriage, Art and Wanda were getting divorced.  Among all the assets that had to be distributed was the family business, a heating, ventilation and air conditioning repair company.  Husband was the operator of the business.  Wife took care of the kids and managed the household.  Now Husband was faced with having …

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Discount for Lack of Marketability Job Aid for IRS Valuation Professionals

WHAT NEW DOCUMENT ARE IRS REVIEWERS USING TO ASSESS DISCOUNTS FOR LACK OF MARKETABILITY? A Two Hour Webinar on Tuesday, August 23rd Will Answer This Intriguing Question The “Discount for Lack of Marketability Job Aid for IRS Valuation Professionals,” (“IRS DLOM Job Aid”) has recently come to our attention, and we are excited to be …

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8 Essential Elements of an Exit Strategy for Business Owners: Part III

Develop a Strong Management Team The development of a strong management team is usually a necessary consideration in the preparation of an exit strategy. This helps to ensure a smooth transition with some continuity of leadership and talent. One consideration is whether, and when, the owner replaces himself/herself as the CEO. An outside person may …

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8 Essential Elements of an Exit Strategy for Business Owners: Part II

Improve Profitability and Cash Flow A company is more valuable when it is profitable and has good cash flow.  Therefore, an owner should always strive to have the company as profitable as possible.  Several steps can be taken to improve the profitability of a company. If the owners are paying personal expenses through the business …

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