A Hands-On Workshop for BV Practitioners
Save the Date: September 16-17, 2008 . Atlanta, GA
Agenda (Please check back regularly for updates)
September 16, 20087:00am - 7:45am
Registration & Continental Breakfast
7:50am - 8:00am
8:00am - 9:00am
Court-Appointed and Neutral Experts: Rules of the Road
Jay Fishman (Moderator), Bill Morrison, John Johnson, and Hon. Jacqueline Silbermann, Esq.
Financial experts are frequently asked to serve as a court-appointed or neutral expert in valuations in connection with divorce cases. With few exceptions, there are no standardized rules for conducting such an engagement. In this session, three practitioners (who among them have conducted thousands of court-appointed or jointly retained assignments) and an esteemed jurist (who often appoints financial experts) will discuss the conduct of such assignments. Attendees will learn how the roles of privately retained, jointly retained and court-appointed experts differ; how to resolve conflicts with regard to scope of work, access to information and levels of inquiry; and what to do when testimony is required and the expert may have to respond to differing opinions from privately retained experts.
Techniques for Measuring Active and Passive Appreciation: Three Perspectives
Chris Mercer, Ashok Abbott, and Frank Louis
Chris Mercer's session presents Mercer Capital’s model for determining “active” and “passive” appreciation in conjunction with a discounted cash flow analysis. The model applies rate-volume analysis to the appreciation of the value of an enterprise in a simple and reasonable way to break out the factors that contribute to enterprise appreciation. The model is based on a primary principle of finance: that the value of the company is equal to a measure of cash flow or earnings times some multiple, and that the multiple is determined by the interaction of investors’ required rate of return for different securities and growth expectations. By analyzing the changes that occur during the period in question to these components of value, some of which management can influence, some of which it cannot, we can gain insights into management’s “active” participation in the appreciation of the enterprise.
10:00am - 10:30am
10:30am - 11:30am
After the Valuation Date: Value Changes
Carole Gailor and Frank Louis
11:30am - 12:30pm
Hiding or Depressing Values of Assets: Let Us Count the Ways
Jay Fishman (Moderator) and Bill Morrison
Often, when an expert is retained, the allegation is raised that the income is down; the business is worth less, and/or assets are missing. In fact, there is a term, “RAIDS” (Recently Acquired Income Deficiency Syndrome), that is commonly used to describe this situation. Three experienced experts discuss the schemes they have seen to hide assets and depress income. Attendees of this session will learn when this situation is real or created, the schemes that are used and how to investigate!
12:30pm - 2:00pm
Key Note Luncheon Speaker: Oh The Troubles I’ve Seen: One Judge’s View of Financial Experts
Hon. Jacqueline Silbermann
Hear one judge’s view on Financial Experts and her perspective from the bench. This keynote address promises to be informative and insightful.
2:00pm - 2:50pm
How BV Experts Can Structure the Best Settlements
Bill Morrison and John Johnson
This session will enable attendees to understand the wide range of financial and non-financial issues addressed in settlements. Through this detailed presentation, attendees can learn specific techniques of settlement and the interpersonal and financial skills used by valuation professionals in the “best settlements.”
2:00pm - 2:50pm
Medical Practices – The Practice Changes Everyday
This session will cover examples of personal and practice goodwill elements in medical practices today and why these issues are important in divorce cases; does the medical specialty make a difference and how; the rapid evolution of intangible assets in medical practices and why; the medical practice chart of accounts: What is it and how does it relate to valuation; Revenue-related issues: What is payer mix? Does it impact value? What role does practice management technology play; Clinical technology and delivery model issues: What is an EMR or a retail clinic? What is outcome measurement and reporting and why; and Workforce issues: Physician Shortage? Staff Leverage? Other Emerging Issues? Attendees of this session will be able to define and discuss important concepts in medical practice valuation in divorce cases; define and explore key emerging issues impacting medical practice valuation in divorce cases; define and discuss accounting terms and financial issues in medical practice valuation; and explore the economic and financial environment for medical practices today.
3:00pm - 3:50pm
Double Dipping: What Is It? Do You Know it When You See it?
Bill Morrison, Bill Dameworth, and John Johnson
Theoretically, many business valuation methods consider the future cash flows, or income, of the business. Support is also paid from income earned after the divorce. Therefore, the issue arises as to whether support is paid from the same income stream used to value a business. Some argue that the same income stream is used to calculate property subject to division as marital or community property and to determine support: hence the term “double dipping” (using the same income stream for two purposes). Others disagree with this concept. This argument intensifies in states which value personal goodwill, such as California, Colorado and New Jersey. Other states, such as West Virginia, do not include personal goodwill as marital or community property subject to division. One of the arguments raised in decisions in these states is that personal goodwill is excluded in order to prevent this double dipping. Three experienced experts discuss the issue of double dipping and how it is handled throughout the country.
3:00pm - 3:50pm
Tackle “Complicated” Issues Head On: Hedge Funds, Private Equity, and Options
For a variety of reasons – including divorce situations – there is a growing need to be able to accurately value a hedge fund business. With 12 years of financial services valuation experience, Steven Levitt of investment banking boutique Park Sutton Advisors will be speaking about the do’s and don’ts in valuing a hedge fund. His presentation will address topics such as fair market valuation of asset management businesses generally in the context of arms-length transactions; fair market valuation of hedge fund incentive fees; wuantitative and qualitative factors considered by buyers in assessing the value of a specific hedge fund business; transactional activity in the alternatives sector over the past few years and what can expect to see in the future and how the marketplace views hedge funds versus hedge funds of funds.
4:00pm - 4:30pm
4:30pm - 5:30pm
Determining Marital Lifestyle: It’s More Than a Checkbook
William Morrison CPA/ABV, Thomas Reck CPA/ABV, and Michael A. Saponara CPA/ABV, J.D.
The session provides the “nuts and bolts” of preparing a lifestyle analysis, addressing the reasons to do a lifestyle analysis, how to prepare a report, and all the practical steps in between. We’ll explore: gathering the right information; estimating and macro analysis required; connecting the lifestyle to the cash flow and balance sheet; considering the components (e.g., format of the data entry, years, etc.); refining the input based on interviews and invoices; adjusting the raw data for unique events; reviewing the interplay with the business valuation, and applying the professional standards to the analysis.
5:30pm - 6:30pm
Networking Cocktail Reception
7:30am - 8:00am
September 17, 2008
8:00am - 9:00am
SSVS-1 and Divorce: What’s the Skinny?
Mr. Hitchner was one of only four members of the AICPA BV Standards Writing Task Force and served for the entire six years up to the June 2007 official release. He has also spent a considerable amount of time studying and presenting on other BV standards as well. His presentation will include a summary presentation of the AICPA Statement on Standards for Valuation Services (“SSVS”); NACVA and USPAP standards update; draft sample report language examples that are in compliance with SSVS, ASA, IBA, NACVA and USPAP standards; comparisons of SSVS to ASA, IBA, NACVA and USPAP standards, common questions and concerns; why these standards are your friend and not your enemy; and how attorneys may try to use SSVS against valuation analysts who haven’t taken the time to fully understand and/or comply with the standards.
What Do Lawyers Expect from Financial Experts
Jay Fishman (Moderator), Don Schiller, Esq. Allan Mayefsky, Esq. Mark Sobel, and Frank Louis
At the outset of an assignment the financial expert and the divorce lawyer effectively form a partnership wherein each provides services to a client regarding the identification, valuation and distribution of marital assets. In addition, the determination of marital lifestyle and historical level of income is often required. This session will delve into the expert-selection process, examining lawyers’ pre-engagement expectations of their financial experts, such as familiarity with the industry, common work history, and disclosure of previous opinions. We’ll also explore attorneys’ expectations during the discovery process, including approaches to obtaining documents, site visits and management interview. Attendees will learn how the expert can assist in the discovery process; understand attorneys’ views toward calculations, summary and full comprehensive reports; and find how to best assist the attorney on cross-examination and/or rebuttal of the opposing expert.
10:30am - 11:00am
11:00am - 12:00pm
How to Conduct a Forensic Investigation
William Morrison, CPA/ABV and Ken Springer
Learn how to determine a party’s income and the value of a business. This session will focus on investigating a closely held business to verify that its assets and income are not depressed or hidden and expenses are not overstated. Attendees see how to form a working hypothesis and test via analytical review, interviews, detailed accounting analysis, and investigative procedures.
12:00pm - 1:00pm
So You Don’t Think We Check? Expert Errors and Plagiarism
This session views the preparation of the business valuation report from the point of view of the lawyer who will be cross examining the expert and attempting to discredit the expert and the opinion of value. The session identifies weaknesses and mistakes made by experts in preparation and writing of their business valuation reports which can be exploited by counsel and how to minimize or avoid those mistakes. This session instructs how the business appraiser can “think like a lawyer” in preparing his or her expert reports thus reducing areas of vulnerability which can be exploited by a competent lawyer.