Litigation and Arbitration: Post-Acquisition Disputes
Hi Welcome to ValuationPodcast.com - A podcast and video series about all things related to business and valuation.\xa0 My name is Melissa Gragg, a business valuation expert in St. Louis Missouri. \xa0
During this episode we will discuss Litigation and Arbitration: Post-Acquisition Disputes from a CPA and accounting expert. We have the privilege to discuss these issues with Scott Stringer, a fellow testifying expert and arbitrator in Naples Florida. \xa0
Welcome Scott!!\xa0
1. Can you help us understand this topic a bit more, what is post-acquisition litigation? \xa0
2. What has been your experience in this area \u2013 or litigation support services in general?\xa0
\xa0 \xa0 \xa0 \xa0 \xa0 a. Discuss general experience as a testifying expert & as an arbitrator
\xa0 \xa0 \xa0 \xa0 \xa0 b. Forum for the disputes \u2013 court, court appointed neutral, AAA & JAMS, private arbitration
3. What are the types of disputes you have encountered & do they start in mediation or arbitration & then proceed to litigation?\xa0
\xa0 \xa0 \xa0 \xa0 \xa0 a. The most prevalent are post-closing adjustments and damages due to alleged\xa0 \xa0 \xa0misrepresentation of financial information &/or non-disclosure of material information\xa0
4. Tell us about post-closing adjustments \u2013 are these accounting adjustments?\xa0
\xa0 \xa0 \xa0 \xa0 \xa0 a. Break down key areas such as GAAP analysis v. the Purchase Agreement (PA), interpretation of GAAP and/or PSA, & allegations of spoliation by the sellers
5. You mentioned damages due to alleged misrepresentation of financial information and non-disclosure of material items. What are some examples and how was damage measured?\xa0
\xa0 \xa0 \xa0 \xa0 \xa0 a. Interest of time, cannot go through every situation where damages are alleged.\xa0 Expert consideration
\xa0 \xa0 \xa0 \xa0 \xa0 b. Damages must be \u201cbut for\u201d the alleged breach or tort\xa0
\xa0 \xa0 \xa0 \xa0 \xa0 c. Reasonable degree of (professional) certainty\xa0
\xa0 \xa0 \xa0 \xa0 \xa0 d. Causal link to the breach\xa0
\xa0 \xa0 \xa0 \xa0 \xa0 \xa0e. Not speculative\xa0
\xa0 \xa0 \xa0 \xa0 \xa0 \xa0f. Every situation unique\xa0
\xa0 \xa0 \xa0 \xa0 \xa0 g. Some methodologies used by experts to determine damages\xa0
6. How do you believe the current economic landscape will impact these types of disputes & damage assessments?\xa0
\xa0 \xa0 \xa0 \xa0 \xa0 a. Projections that buyers based its deal on may fall significantly short of expection affecting value
\xa0 \xa0 \xa0 \xa0 \xa0 b. Earnout expectations of sellers may not be achieved
\xa0 \xa0 \xa0 \xa0 \xa0 c. Buyers may assert that projections not attained was due to misrepresentation, while sellers will dispute that it was due to factors post sale
\xa0 \xa0 \xa0 \xa0 \xa0 d. The key will be causal link to asserted damages, along with reasonable certainty and lack of speculative assertions
Melissa Gragg
CVA, MAFF, CDFA
Expert testimony for financial and valuation issues
http://www.BridgeValuation.com
Cell: (314) 541-8163
Bridge Valuation Partners, LLC
melissa@bridgevaluation.com\xa0
Scott A. Stringer
Managing Member
Stringer Forensics LLC
2870 Lone Pine Ln
Naples, FL 34119
Scott@stringerforensics.com
239.250.1693
312.307.5916