Business Valuation and Financial Litigation—How to Do It: From Foundations to Advanced

Fraudulent Conveyance Actions—Challenges Facing the Valuation Expert

Thursday, June 6
10:10 a.m.–11:50 a.m.
2 hours CPE
When facing financial distress, companies and their creditors often attempt to recoup their investment by bringing fraudulent transfer actions to recover assets. Financial distress is defined as having unreasonably small working capital or liabilities exceeding assets at a fair valuation. To recover assets in a fraudulent transfer case, the plaintiff must prove that the company was either insolvent at the time of transfer or became insolvent as a result of the transfer. The solvency determination relies on whether: the company’s debts are greater than the company’s assets at a fair valuation; the company has the ability to pay its debts as they come due; and the company has adequate capital for the business in which it is engaged.

After completing this session, attendees will be able to:

• Define and provide examples of a fraudulent conveyance
• List and define the “Badges of Fraud”
• Differentiate between “Legal" and “Equitable insolvency”
• Identify the standards which the “Balance Sheet Test” must meet to satisfy the Court that insufficient assets exist to meet all of a companies liabilities, including perspective and contingent liabilities
• Illustrate the application of accounting standards codification 205-20, “reporting discontinued operations and disclosure of disposals of components of an entity” to quantify the contingent/recurring costs associated with contingent operations
• Explain the Supreme Court’s recent decision in BNY Corporate Trustee Services Ltd v. Eurosall (2013) UKSC 28

Total CPE: 2 hours
Field(s) of Study: Accounting—1 hour; Finance—1 hour

Who Should Attend:

CPA's and attorneys involved in bankruptcy litigation as well as Merger and Acquisition transactions.

Program Level and Prerequisites:

Basic: Learning activity level most beneficial to individuals new to a skill or an attribute.

Advanced Preparation:

None, but must have experience preparing valuation reports for various purposes.

Shelley Brown

Shelley  Brown

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Estimating Long-Term Growth Rates

Thursday, June 6
10:10 a.m.–11:50 a.m.
2 hours CPE
The performance of equity investments is inextricably linked to economic growth. The estimate of a long-term sustainable growth rate for a business enterprise is a key input for valuation estimates using the Income Approach. Growth rate assumptions are also embedded in market multiples. Growth rate estimates are available from both theoretical models as well as empirical sources and can be measured in a variety of ways (e.g., revenues, free cash flow to the firm, free cash flow to equity, etc.). Further, the appropriate length of the discrete valuation period (i.e., the foreseeable future) in the discounted cash flow model should be set once the growth in the cash flow stream being valued is expected to gravitate to the expected long-term, (i.e., “the forever”) normalized growth rate.

Research on long-term growth rate estimates disclosed in SEC filings suggests a wide range of growth estimates have been used by appraisers. And what is the relationship between the long-term sustainable growth rate to be used to the growth rates often provided by security analysts? What are the differences in underlying assumptions? Economists have also raised questions regarding the sustainability of long-term growth rates. Does the risk of the cash flows change over time and how can this changing risk be reflected in the discount rate? The presenters will explore this important valuation input.

After completing this session, attendees will be able to:

• Describe the relationship between the long-term sustainable growth rate to be used to the growth rates often provided security analysts
• List the differences in underlying assumptions
• Identify questions raised by economists regarding the sustainability of long-term growth rates

Total CPE: 2 hours
Field(s) of Study: Accounting—2 hours

Who Should Attend:

CPAs, valuators, practitioners, and those interested in developing and advancing their skills.

Program Level and Prerequisites:

Update: Learning activity level that provides a general review of new developments.

Advanced Preparation:

None

Roger Grabowski

Roger  Grabowski

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Professor Ashok Abbott

Professor Ashok  Abbott

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Examining the Numerator in the Valuation Equation (Forecasts and Projections).

Thursday, June 6
12:50 p.m.–1:40 p.m.
1 hour CPE
Most presentations and most valuations focus on the denominator in the value equation, i.e. the COC. However the numerator can have a very material impact on the valuation conclusion. This presentation focuses on the numerator, especially forecasts and projections and how to insure that they are valid and to what degree.

After completing this session, attendees will be able to:

• Demonstrate whether a forecast or projection is valid for use as a numerator in the value equation
• Describe the differences between a forecast and a projection
• Review the forecasts or projections and make sure that the assumptions are valid
• Develop a supportable projection or forecast
• Evaluate the specific risk to the overall valuation that should be considered given the status of the projections or forecasts

Total CPE: 1 hour
Field(s) of Study: Accounting—1 hour

Who Should Attend:

Any professional involved in determining the value of a business interest

Program Level and Prerequisites:

Intermediate: Learning activity level that builds on a basic program most appropriate for individuals with detailed knowledge in an area.

Advanced Preparation:

None

R. James Alerding

R. James  Alerding

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The Concept of Apportionment in Patent Infringement Matters—Methods and Recent Case Law

Thursday, June 6
12:50 p.m.–1:40 p.m.
2 hours CPE
This session will discuss the issue of apportionment in IP patent infringement matters, including a review of the concept, methods in which damages expert have sought to achieve it, including the pros and cons of conjoint analyses, hedonic regressions, patent citation analyses, and others, as well as a brief non-legal discussion of recent case law practitioners should be aware of when conducting their analyses.

After completing this session, attendees will be able to:

• Explain the concept and importance of apportionment in damages analyses relating to IP damages
• Describe the current methods currently being employed to obtain apportionment
• Identify recent case law relating to the topic of apportionment in IP litigation matters

Total CPE: 1 hour
Field(s) of Study: Economics—1 hours

Who Should Attend:

CPAs, valuators, practitioners, etc.—anyone interested in developing and advancing their skills for this topic.

Program Level and Prerequisites:

Overview: Learning activity level that provides a general review of a subject area from a broad perspective.

Advanced Preparation:

None

Richard Eichmann

Richard  Eichmann

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Is the Value Estimate Reasonable?

Thursday, June 6
2:00 p.m.–3:40 p.m.
2 hours CPE
Determining reasonableness of a value estimate for "small" (under $10 million in value) firms and professional practices (other than medical). Why does reasonableness matter and in what circumstances? Defining "reasonable" as it relates to value and what factors and valuation elements need to be considered in the determination of reasonableness.

After completing this session, attendees will be able to:

• Determine and define the reasonableness of a value estimate and the factors that evidence reasonableness in the context of tax, litigation, buy/sell and M&A.

Total CPE: 2 hours
Field(s) of Study: Taxes—1 hour; Auditing—1 hour

Who Should Attend:

CPAs, valuation practitioners, forensic accountants

Program Level and Prerequisites:

Update: Learning activity level that provides a general review of new developments.

Advanced Preparation:

Familiarity with valuations in different circumstances and venues.

P Dermot O'Neill

P Dermot  O'Neill

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Projecting But-For and Mitigating Earnings in Personal Injury and Wrongful Death

Thursday, June 6
2:00 p.m.–3:40 p.m.
2 hours CPE
Information forthcoming

After completing this session, attendees will be able to:

• Information forthcoming

Total CPE: 2 hours
Field(s) of Study: Information forthcoming

Who Should Attend:

CPAs, valuators, practitioners, etc.—anyone interested in developing and advancing their skills for this topic.

Program Level and Prerequisites:

Intermediate: Learning activity level that builds on a basic program most appropriate for individuals with detailed knowledge in an area.

Advanced Preparation:

None

Shannon Shipp

Shannon  Shipp

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Full Built-In Gain Tax Liability—How Future Value Analysis Fails & What to Do About It

Thursday, June 6
4:00 p.m.–4:50 p.m.
1 hour CPE
This session presents the evolution in Tax Court thinking that led to the misguided 2014 Estate of Richmond decision. It then presents the correct economic method to provide a proper answer to the value of built-in gain based on a future exit date. The question at hand is whether a speculative approach is appropriate. Because it is based in fact, accrual based valuation has the fairest basis for built-in gain valuation, but the Richmond ruling demands that taxpayers be ready to defend against the Tax Court’s methodology with an economic rebuttal.

After completing this session, attendees will be able to:

• Describe the history of BIGL
• Identify the faulty analysis that Led the IRS Astray
• Explain how to avoid an IRS argument for future value
• Present the correct model to solve the BIGL Question

Total CPE: 1 hour
Field(s) of Study: Economics—1 hour

Who Should Attend:

Attorneys, Practitioners, Estate Trustees, Fiduciaries

Program Level and Prerequisites:

Intermediate: Learning activity level that builds on a basic program most appropriate for individuals with detailed knowledge in an area.

Advanced Preparation:

None

James Lisi

James  Lisi

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Are the Experts Even Working on the Same Case? How to Reconcile Significant Differing Expert Opinions

Thursday, June 6
4:00 p.m.–4:50 p.m.
1 hour CPE
When damages are at stake, the plaintiff and defendant often hire damage experts to help the trier of fact determine the appropriate amount to award to the injured party if liability is established. Each expert is supposed to provide an objective analysis of the case and opine with reasonable certainty to the damages that were incurred. So why does it often seem that the two experts arrive at damage opinions that look like they belong in two different cases? Why is the plaintiff’s expert’s opinion of damages almost always higher than the defendant’s expert’s opinion of damages? This session will use real case examples to explore the reasons why divergent opinions can occur.

After completing this session, attendees will be able to:

• Identify common reasons that expert’s opinions can be so different
• Develop strategies for addressing these differences in their report or in deposition

Total CPE: 1 hour
Field(s) of Study: Accounting—1 hour

Who Should Attend:

CPAs, valuators, practitioners, etc.—anyone interested in developing and advancing their skills for this topic.

Program Level and Prerequisites:

Intermediate: Learning activity level that builds on a basic program most appropriate for individuals with detailed knowledge in an area.

Advanced Preparation:

None

Mallory Ashbrook

Mallory  Ashbrook

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Rebekah Smith

Rebekah  Smith

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Methodologies for Discounting Lost Profits—Ex Ante, Ex Post and Hybrid

Friday, June 7
10:10 a.m.–11:50 a.m.
2 hours CPE
Calculating the present value of lost profits is a two step process. First, the projected losses must be estimated. Then, the losses must be discounted to present value. To calculate the present value, experts must know what methodology and discount rate should be used. This session reviews the three most commonly discussed methods for discounting lost profits to present value and issues related to determining the appropriate discount rate. The discussion will include theory and practical applications of the three methods, court decisions regarding discount rates, and case studies of rates used in calculating present value by the presenter that have been accepted by various courts.

After completing this session, attendees will be able to:

• Differentiate between the three commonly discussed methodologies for discounting lost profits to present value
• Calculate the present value of lost profits using each of the three methods
• Select the method most appropriate for a specific assignment
• Utilize the selected method for calculating the present value of lost profits for a specific assignment
• Explain why the selected method was appropriate for that specific assignment
• Critique the method used by an opposing expert based on the methodology selected

Total CPE: 2 hours
Field(s) of Study: Economics—1 hour; Finance—1 hour

Who Should Attend:

CPA's, attorneys, economists, practitioners, individuals assessing lost profits in a litigation environment

Program Level and Prerequisites:

Overview: Learning activity level that provides a general review of a subject area from a broad perspective.

Advanced Preparation:

None

Allyn Needham

Allyn  Needham

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Normalizing Owner Compensation in Business Valuations

Friday, June 7
10:10 a.m.–11:50 a.m.
2 hours CPE
This session explains the accepted methodologies for normalizing owner compensation in business valuations (as well as for resolving shareholder disputes and IRS audits). It includes practical tips and recommendations for improving efficiencies, documenting analyses, avoiding common mistakes and drawing conclusions. It also includes examples using different sources for compensation comparability data and highlights the key strengths and weaknesses of each of those sources.

After completing this session, attendees will be able to:

• Explain the accepted methodologies for normalizing owner compensation
• Prepare analyses of compensation that readers of valuation reports will understand
• Defend their conclusions on this important and sensitive normalizing adjustment

Total CPE: 2 hours
Field(s) of Study: Accounting—2 hours

Who Should Attend:

Business valuators regardless of their level of experience,Advisors who may be involved in shareholder litigation over compensation, and Advisors who help closely-held businesses during IRS audits.

Program Level and Prerequisites:

Intermediate: Learning activity level that builds on a basic program most appropriate for individuals with detailed knowledge in an area.

Advanced Preparation:

None

Stephen Kirkland

Stephen  Kirkland

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What Forensic Accountants and Attorneys Need to Know About Tax Aspects of Damage Awards

Friday, June 7
12:50 p.m.–1:40 p.m.
1 hour CPE
This comprehensive session will focus in on practical strategies for dealing with the important tax aspects of personal injury, commercial, employment and other lawsuit awards and review the many traps for the unwary. Confusion and litigation abound relative to the taxability of damages for commercial awards; personal injuries or sickness; differentiate for damages for nonphysical injuries such as gender and age discrimination or in harassment cases; punitive damages; interest on deferred awards payouts; tax issues in structured settlements; tax issues differing from state to state’ and many other “clear as mud” issues. This session will give attendees the answers to these and other important questions.

After completing this session, attendees will be able to:

• Clarify the myth prevalent among many that all damage awards ARE straight forward when it comes to tax issues
• Describe how, with proper planning and drafting, legitimate and supportable positions can be taken to benefit injured parties
• Explain how, when and why to advise clients and counsel to the many traps for the unwary
• List ways the recent tax law changes and IRS positions will affect many damage awards
• Identify when to alert attorneys that they should get the accountant involved early on, even in drafting of initial complaints

Total CPE: 1 hour
Field(s) of Study: Taxes—1 hour

Who Should Attend:

All those serving in an outside consulting capacity—CPAs, CVAs, ASAs and other such advisors, as well as attorneys and paraprofessionals.

Program Level and Prerequisites:

Overview: Learning activity level that provides a general review of a subject area from a broad perspective.

Advanced Preparation:

None

Martin Abo

Martin  Abo

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Valuation Issues in Developing and Executing Buy-Sell Agreements

Friday, June 7
12:50 p.m.–1:40 p.m.
1 hour CPE
A buy-sell agreement is one of the most common tools utilized by lawyers and business advisors in protecting their business owner clients. In this session, you will learn about valuation issues that are critical to buy-sell agreements, such as the use of formulas and valuation discounts, which you can then use to advise your attorney and business owner contacts.

After completing this session, attendees will be able to:

• Proactively plan with attorneys and business owners to help craft buy-sell agreements that achieve the goals of the owners, particularly from a valuation standpoint
• Identify the most common valuation mechanisms used in buy-sell agreements and the pros/cons of each
• Provide assistance to attorneys and business owners in regard to the valuation provisions of buy-sell agreements

Total CPE: 1 hour
Field(s) of Study: Business Law—1 hour

Who Should Attend:

Valuation experts, CPAs, attorneys, business owners, exit planners, financial planners

Program Level and Prerequisites:

Basic: Learning activity level most beneficial to individuals new to a skill or an attribute.

Advanced Preparation:

None

Sean Saari

Sean  Saari

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Robert Ranallo

Robert  Ranallo

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The Good, The Bad and the Unusual—A Workshop on Complex Forensic Accounting Applications

Friday, June 7
2:00 p.m.–3:40 p.m.
2 hours CPE
A workshop exploring unusual and complex forensic accounting and business valuation cases mostly in the domestic law area and the problem resolutions employed by the experienced practitioners. Includes explanation of the testimony given and issues encountered at trial. Attendees are encouraged to participate with their own ideas and experiences. Topics include the Multi-attribute Utility Model (MUM), Unreported Cash, "I’m losing money during my divorce", We Tote The Note, Using the Coverture Fraction in Executive Compensation, No Inventory, No Valuation? and "You’re not qualified to talk about real estate improvements."

After completing this session, attendees will be able to:

• Employ creative techniques to unusual forensic accounting and valuation problems encountered in litigation cases
• Identify and differentiate between fact and fiction often seen in domestic law cases as business owners spin their version of facts and their attorneys willingly participate

Total CPE: 2 hours
Field(s) of Study: Economics—2 hours

Who Should Attend:

CPAs, CVAs, attorneys and anyone involved in litigation

Program Level and Prerequisites:

Intermediate: Learning activity level that builds on a basic program most appropriate for individuals with detailed knowledge in an area.

Advanced Preparation:

None

Robert Vance

Robert  Vance

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Crossing the Bridge to Liquidity—DLOM and DLOL

Friday, June 7
2:00 p.m.–3:40 p.m.
2 hours CPE
Information forthcoming

After completing this session, attendees will be able to:

• Information forthcoming

Total CPE: 2 hours
Field(s) of Study: Information forthcoming

Who Should Attend:

CPAs, valuators, practitioners, etc.—anyone interested in developing and advancing their skills for this topic.

Program Level and Prerequisites:

Intermediate: Learning activity level that builds on a basic program most appropriate for individuals with detailed knowledge in an area.

Advanced Preparation:

None

Lari Masten

Lari  Masten

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Visual Aspects of Becoming the Best Expert—It’s Not Just Your Math

Friday, June 7
4:00 p.m.–4:50 p.m.
1 hour CPE
Information forthcoming

After completing this session, attendees will be able to:

• Information forthcoming

Total CPE: 1 hour
Field(s) of Study: Personal Development

Who Should Attend:

CPAs, valuators, practitioners, etc.—anyone interested in developing and advancing their skills for this topic.

Program Level and Prerequisites:

Overview: Learning activity level that provides a general review of a subject area from a broad perspective.

Advanced Preparation:

None

T.J. Liles-Tims

T.J.  Liles-Tims

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Business Valuation Benchmarking Techniques—Tools and Tips on How to Support and Enhance Your Business Valuation

Friday, June 7
4:00 p.m.–4:50 p.m.
1 hour CPE
Valuators use benchmarking in all aspects of the valuation, identifying potential financial deviations, normalization adjustments, and supporting conclusions. This session will look at various data sources used as benchmarks, how to interpret and apply the data. Techniques to apply data to different aspects of the valuation. Identify useful analysis to support your conclusions.

After completing this session, attendees will be able to:

• Identify various sources and uses for benchmarking
• Develop analytic models which you can incorporate into different aspects of a business valuation
• Explain benefits of benchmarking

Total CPE: 1 hour
Field(s) of Study: Accounting—1 hour

Who Should Attend:

CPAs, valuators, practitioners, etc.—anyone interested in developing and advancing their skills for this topic.

Program Level and Prerequisites:

Intermediate: Learning activity level that builds on a basic program most appropriate for individuals with detailed knowledge in an area.

Advanced Preparation:

None

Marc Bello

Marc  Bello

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