Excellent speakers and interesting topics highlighted the conference on business valuation put on by the New York State Society of Certified Public Accountants in New York City on May 20. The audience was lively and asked good questions.
Responding to one question, Michelle Gallagher (Gallagher & Associates CPAs, PLC) advised that, when collecting information in divorce cases, you should talk to the parties without the attorney present. “People will be more open with you without the attorney in the room,” she says. This is especially true with the out spouse’s attorney, as they especially get tight-lipped, she notes.
Another attendee asked whether the “pox on all valuators” attitude by the bankruptcy courts has changed. “There’s a higher and higher bar for valuation experts in the bankruptcy courts,” says Robert F. Reilly (Willamette Management Associates). The judges have a strong “convince me” attitude and are not easily persuaded by valuators. They feel that independent market evidence, such as stock price, is more indicative of value than the testimony of paid valuation experts. Also, judges feel they have a lesser chance of being appealed if they use independent information when it’s available.
Other topics at the conference included the market approach using BIZCOMPS, the use of put option models to determine a reasonable DLOM, cheap stock valuations, lost profits, and adjusting restricted stock transactions to estimate marketability discounts. Edward F. Esposito, the conference chair, says the audio of the conference sessions will soon be available on the NYSSCPA website.
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