Most forensic business appraisers know they’re going to get beaten up a bit when they take the witness stand. But in the recent In re Med Diversified, Inc. bankruptcy decision (BVWire™ #47-3), the appraisers didn’t appear to have a fighting chance. Witness the following excerpts from the transcript of testimony by plaintiff’s expert Robert Cimasi, MHA, ASA, CBA, AVA , FCBI, CM&A, CMP, president of Health Capital Consultants (St. Louis):
THE COURT: …I have a discreet understanding of my limitations, but I also have an understanding of what my experience tells me in having listened for the past 30 years to appraisers, and while they may not bear all the credentials and all the publications, I have yet to find an appraiser of value of non-real estate that ever says anything that’s cogent and persuasive. Go ahead. I’m always willing to be persuaded.
THE COURT: I’d love to finally found an appraiser who convinces me that through a rigorous application of a methodology, that person can effectively value a company. Several have tried. None have succeeded, no one as sophisticated as you, but in the universe of companies rather than real estate projects or cash flows, the science isn’t there yet, at least as you’re presenting it to me because I’m testing it at every single conceivable angle simply because I have a tremendous degree of skepticism….
THE COURT: I don't really care about your certifications, although I do appreciate that this is somehow made up by persons who have some professional standing in connection with some effort by the government to improve the quality and integrity of appraisals... So you don't need to go through all of these. I'm sure they're all noble, but I really want to know what cases you appeared in what books you've written or major articles.
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