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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Is Your Company Vulnerable to Fraud – Part II: Fraud Indicator Checklist

HOW TO USE THE CHECKLIST 1. Review the concept for each internal control area and answer the questions following each section. 2. Each answer identifies an area that needs stronger internal controls. I. SEGREGATION OF DUTIES Concepts: • Certain accounting/bookkeeping functions are designed to cross-reference each other for accuracy.  If the same person is responsible for multiple duties, the …

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Is Your Company Vulnerable to Fraud? Part 1

Evaluate your business’ vulnerability with this simple checklist The opportunity for fraud in your business may be greater than you think.  It may be quite easy to pull off and it may come from one of your most trusted staff.  How does your company measure up in controlling the potential for fraud and what can …

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Due Diligence Tips for Buying a Business – Part III

LIABILITIES Compliance with bulk sales laws for asset purchases: • Make sure the bulk sale notifications specified by local law are complied with.  The effect of failure to comply with the bulk sales law enables creditors to “follow the assets” and have valid claims against the new owner (the buyer). • Provide in the asset purchase/sale agreement …

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