Quite often, attorneys and business appraisers do not get around to having frank discussions about many valuation-related issues and matters until someone’s ox is in the proverbial ditch. In this session, L. Paul Hood, Jr., a recovering tax lawyer, will outline a curated list of sometimes fierce conversations that attorneys and business appraisers must have, which include the following subjects:

Buy-sell agreements. Buy-sell agreements are ubiquitous and virtually almost always problematic. Paul will address several issues that create problems when buy-sell agreements are triggered, focusing on what can be done now, with new agreements, or with modifications to existing agreements, to prevent future ticking time bombs from exploding on clients (and sometimes on their attorneys and business appraisers). Basic problems can exist regardless of the sophistication of counsel or the size of the clients.

• The “words on the pages” of buy-sell agreements and entity transfer restrictions in governance documents must be present to describe workable valuation processes.
• A common, seemingly logical method for averaging a third appraisal conclusion with the first two can lead to surprising and disturbing results.
• The TCJA can have a major impact on the operation of buy-sell agreements.
• Valuation expert vs. industry expertise for buy-sell agreement appraisals.

A discussion of the following valuable conversations for attorneys and business appraisers to have will be addressed:

• Buy-Sell Agreements and Valuation Processes
  
  • Issues arising from buy-sell agreements and entity transfer restrictions.
    
  • Strategies for creating and modifying agreements to avoid future problems.
    
  • Real-life examples illustrating common pitfalls and solutions.
    
• Challenges in Appraisal Methods
  
  • Problems with averaging appraisal conclusions and unexpected results.
    
  • Impact of the Tax Cuts and Jobs Act (TCJA) on buy-sell agreements.
    
  • Comparing valuation expert qualifications versus industry expertise.
    
• Business Appraisal Review
  
  • Key elements to discuss in the review of business appraisals.
    
  • The role of attorneys in reviewing and influencing appraisal reports.
    
• Fair Market Value and Litigation
  
  • New perspectives on fair market value and hypothetical negotiations.
    
  • Differences between an expert who testifies versus an expert testifier.
    
  • The impact of advocacy on the credibility and outcome of litigation.
    

1. Participants will receive a comprehensive introduction to the important issues that can arise in the context of a business valuation engagement, from the lawyer’s recommendation and engagement of the business appraiser to attempting to edit or change the business appraiser’s conclusions and/or final business appraisal report.
   
2. Registrants will learn the issues in a buy-sell agreement business valuation engagement that can arise between a lawyer and the business appraiser.
   
3. Attendees will gain an appreciation of the fine points when a business appraiser is serving as an expert witness in any contested matter, tax or non-tax.