What’s the one critical question to ask management?

BVWireIssue #84-3
September 23, 2009

Consider the following recent comments by courts on the importance of conducting management interviews to verify financial data and provide credible support for expert value conclusions:

  • “An expert must independently verify facts given to him, rather than accepting [them] at the word of ... counsel.” MDG Int’l v. Aussie Gold, Inc., 2009 WL 1916728 (S.D. Ind.).
  • “[The expert] did not independently verify the source and accuracy of the data. [He] did cross-check the information against other documents, but the bottom line is that [he] never talked to anyone at [the company] to verify the accuracy of the information in any of the documents he reviewed. [His] information was received solely from…counsel.” Lyman v. St. Jude Medical, Inc., 2008 WL 2224352 (Wisc.).
  • “[The taxpayer’s appraiser] spent 3-1/2 days at the company and interviewed 12 employees, spending considerable time with 6 of them, including…the President and Chairman of the Board and…the General Counsel.”  By contrast, “[the government’s appraiser] met with…management just once, for about 2-1/2 hours.” Kohler v. Comm’r., 2006 Tax Ct. Memo LEXIS 156.
  • [The magistrate] found Wife’s expert…to be credible because he utilized financial statements, considered the performance of the company since the last analysis, and interviewed management to learn what has happened behind the numbers and to obtain other key data and information that are not contained in the financial statements.” Anzalone v. Anzalone, 2003 Pa. Super. LEXIS 3716.

Do you know the one, critical question to ask management? “What’s the worst conceivable thing that could happen to this company externally?”, says Warren Miller (Beckmill Research). Join Miller and Russell Hodson (Hewlett Packard) on Wednesday, September 30th to find out the next most important question—and all the key follow-up points—during BVR’s 100-minute teleconference, “Using Management Interviews to Uncover What Really Matters.” Participants can receive two CPE credits. To register, click here.

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