Top Expert Answers for Today’s Tough BV Questions

In BVR’s recent webinar, Power Panel: Live Expert Answers for Today’s Tough BV Questions, experts Jay E. Fishman, Michelle Gallagher, Ken Pia, and Jeffrey Tarbell covered various hot topics that affect the business valuation profession. These questions ranged from the basics, such as “What will 2021 look like?” to “What are your thoughts on the current state of the ESOP litigation environment particularly with the new administration coming in?” Here, we summarize five of the questions and answers. For more information, be sure to check out the complete recording and transcript of the session.

1. Given the new year and all that has changed, what will 2021 look like?

As far as 2021 goes, we are in for another year of uncertainty. The economy and the recovery to the pandemic are still a wild card. The vaccines are coming out but not as quickly. Remote work environment with staff and site visits has really changed the work dynamic, how things get done, and how court proceedings happen, even after the COVID-19 vaccine is released. You must be aware of the potential change in a valuation date as it could change a litigation matter, pre-COVID-19 and post-COVID-19.

Virtual reality is here to stay for a while, especially as it relates to the courts, and it does require an extra layer of preparation. When you are preparing for a litigation matter or a formal due diligence meeting, not only do you have to prepare for the case at hand, but you also must prepare for the virtual technology. (Get tips on virtual testimony from our recent blog post.)

2. With respect to preparing a business valuation, what aspects should be considered and reported amid COVID-19?

On the reporting side of things, very early on, there were caveats relating to the COVID-19 pandemic. Now that a year has passed, the known, the knowable, and the valuation dates are all hindsight. Most people have settled on the known or knowable dates and when they were hitting. But, in terms of reporting, you must do your best to include as much information as you can about what you knew at that time and what was available at that time.

You must make sure to identify all the various key dates. Obviously, that is when something became known or knowable, maybe even potentially going back to prior economic recessions and talking about that in a company and how a company recovered from that. As much information as possible is key.

3. Numerous ESOP litigation cases have been in the BV news in the past few years. What are your thoughts on the current state of the ESOP litigation environment particularly with the new administration coming in?

Regarding the activity of litigation, it has slowed in the last year. Wilmington alone settled dozens of cases. There are certainly fewer open cases, but that may be a one-time event. A slowdown or even a simple perception of a slowdown in enforcement is truly indicative of any enforcement slowdown. From the Department of Labor (DOL) and the private plaintiff sense, there is a shift of the prey. A lot of the big trustees have settled out. They have consent agreements. They have procedures in place and agreements with the DOL.

As far as the new administration and an increase in taxes, very generally it bodes well for new ESOP transactions. ESOPs are a tax-incentivized way to do a liquidity event, a succession strategy with a company. There was a lot of activity even during 2018, 2019, and 2020 with depressed tax rates. So, with new increased tax rates, whether it be capital gains, ordinary income, or both, we should see more activity in the ESOP space.

4. The pandemic has been such a moving target, when do you believe the true effects of COVID-19 were known or knowable?

Whenever you are faced with uncertainty in your own decisions in valuation, look to the marketplace. What could be told from how long it would last? Certainly, nobody knew, and that is kind of the point of the uncertainty that it introduced. Look at stock prices. Look to the Volatility Index (VIX), which skyrocketed in early April. You can tell from the market that around late February it was truly known or knowable. There were competing arguments about what the recovery looked like. Again, taking your own position is the best.

5. What does the future of up-and-coming leadership on the ASA Business Valuation Committee look like?

Young up and comers will be on the ballot this year, and they are folks that will contribute well. Every chapter has a co-author who is a senior statesman and one of which is a young up and comer. The key is to identify folks and bring them into the loop, into leadership positions, and into speaking opportunities. It is hard to find the right people. We all know that. They are few and far between, but they are definitely out there. This profession continues to grow and interest people.


As mentioned above, the future of the business valuation industry looks different from before; however, the future will still be just as highly complex. Providing a valuation conclusion in the industry requires a complete understanding of the subject company in its past and present, which can be time-consuming. Also, getting your arms around all the new and unique considerations can be difficult. To get more detailed questions and answers on the issues you think about, check out BVR’s next Power Panel webinar on April 6 featuring a round of questions with new thought leaders.