Top 10 Tips From the 2020 AAML/BV Virtual Divorce Conference


Family law attorneys, valuation professionals, and industry experts connected virtually this fall to share advice during the Virtual Divorce Conference brought to you by the American Academy of Matrimonial Lawyers (AAML) and Business Valuation Resources (BVR). Here are the top 10 key takeaways from the many great sessions with top thought leaders in the profession.

  1. Beware of reductions in salary. 
    In a session on executive compensation, the panel noted that there are many questions to ask if you see a salary reduction, such as: Was the reduction permanent or temporary? Did the employee spouse volunteer for the reduction (i.e., was there an ulterior motive to have less income for divorce purposes)? Is there a time frame for recompensation (if so, when)? Is the reduction limited to the employee spouse or was it across the board?

  2. Pre-COVID-19 valuations are getting updated. 
    There seems to be a consensus among attorneys and appraisers that simply offering to the court a Dec. 31, 2019, valuation without more is not a good idea. Some analysis of what happened to the industry and your subject company needs to be provided. Many judges have opted to hold over cases to 2021, at least in part to see what happens to a company in the meantime.

  3. More scenario analyses being used. 
    There is a lot more scenario/probabilistic analysis in the income approach to deal with cash-flow uncertainty. This can be the time-tested best-base-worst case analysis or a two-pronged approach with one scenario that sees a second wave of the pandemic and one that does not. Use Monte Carlo? Yes, but it’s hard to explain to some courts.

  4. Dealing with PPP loans.
    By now, a company should have an idea of how much will be forgiven. Also, ideally, the PPP money was placed in a separate account and used for expenses as they occurred (which are not deductible).

  5. Check out McKinsey. 
    Good, free material is available from McKinsey on economic and financial analysis of the COVID-19 crisis. One particularly good chart shows projected small-business recoveries by industry (click here to view).

  6. Pick up the phone! 
    It’s prudent to assume there is no attorney-client privilege for communication with the financial expert and that written documents, including texts and emails, are discoverable. To avoid discovery, attorneys and experts should communicate as much as possible using old-fashion telephone calls.

  7. Make a good online appearance. 
    Some law firms have used consultants to tutor attorneys on lighting, camera position, makeup, and other aspects related to on-camera presentations. Experts should ask attorneys about this and learn from their technical insights.

  8. Watch your background. 
    No, we’re not talking about your experience—this is about what’s in the background when you are testifying online. One attorney advises that the background be neutral and quiet with nothing to distract the viewer. Just as she was saying this, a cat wandered in right behind her!

  9. Use pictures. 
    Financial charts and graphs that visualize the impact of COVID-19 on the industry in which the company operates and the specific company tend to be much more persuasive to the court than narration.

  10. Landscape will keep shifting. 
    Speakers made it a point to say that what they say related to the pandemic may change in the coming months. This is a shifting landscape, so you need to keep up-to-date on legislative initiatives and developments.

Conclusion

If you weren’t able to attend the virtual conference, you’re in luck! You can get the training pack of the entire 2020 AAML/BVR Virtual Divorce Conference, which includes a recording of all the sessions plus the additional ancillary materials. Learn more about the conference, the speakers, and the sessions here.


Categories