Our professionals have worked on numerous high profile and complex forensic accounting and business advisory engagements. Example matters include:
Consultant in Arbitration Proceeding related to Purchase Price Dispute
Provided accounting advisory services to one of the largest private equity firms worldwide related to a purchase price dispute in its' $1B acquisition of a global software company. Reviewed the purchase price adjustment provisions set forth in the acquisition agreement, analyzed the closing balance sheet and related accounting judgments, analyzed the target calculation per the acquisition agreement, and provided input on how each should impact the final purchase price. Worked closely with counsel to craft the arbitration position paper under a very tight deadline.
Transaction Advisory Services for Fortune 100 Company
Engaged by a Fortune-100 company to advise them on a potential investment. Analyzed proposed transaction details and built numerous financial models projecting the cost and potential cash flows from various investment scenarios. Advised company on investment options and assisted them during the negotiation process.
Government Contract Arbitration
In a contract dispute between the private operator of a state lottery and the state government, prepared calculations related to adjustments to certain incentive payment milestones. Issued expert report to a neutral arbiter with analysis and explanations for the adjustments to supplement the private operator’s claim submission. Arbitration resulted in a multi-million dollar favorable ruling for our client.
Post-Acquisition Dispute Consultant in Software Industry
Provided accounting advisory services to counsel of a large software company in a post-acquisition purchase price dispute. The dispute centered around software revenue recognition policies of the acquired company. Provided accounting analyses and advice regarding software revenue recognition rules as well as assistance on other disputed account balances that impacted the final purchase price. Worked closely with counsel in drafting several pleadings submitted in the related arbitration proceedings, which resulted in a favorable multi-million award for our client.
Forensic Accountants for Board Level Special Investigation
Engaged by legal counsel to a Special Committee of the Board of Directors for a publicly traded company to investigate alleged improper use of company assets by an executive as well as improper expense accounting by senior management. Procedures involved interviews, a risk assessment, review of internal controls and agreed upon forensic accounting procedures. Communicated throughout the process with legal counsel and the Special Committee. Reported investigation results, amounts reimbursable to the company and internal control recommendations to counsel, the Special Committee, senior management and the independent auditors, a big four firm.
Insurance Company Fraud Investigation
Engaged by counsel of a major insurance company, in a whistleblower allegation, to investigate alleged improper use of company assets and false expense reporting by the senior executive overseeing its claims division. Analyzed over 15 years of disbursement detail to identify any payment irregularities. In addition, reviewed and forensically analyzed over ten years’ of expense reports and supporting documentation to investigate inappropriate dealings with the entity’s largest vendor. Reported investigation results to counsel, the company, and the parent company, as well as provided an interim report on observations of internal control issues and recommendations, which the parent immediately implemented. In addition, calculated amounts reimbursable to all parties from the perpetrated fraud.
Accounting Advisory for Pre-IPO Pharmaceutical Company
Engaged by a development-stage specialty pharmaceutical company to assist legal counsel with responding to an SEC inquiry and Wells Notice related to certain equity transactions. Compiled and verified the company’s debt and equity activity over time, which included numerous sales of debt, equity and hybrid instruments to both related parties and third parties. Assisted counsel in preparing a Wells submission and assisted the company in preparing a GAAP-based set of financial statements.
Testimony for SEC Injunctive Relief Action
Provided testimony in the United States District Court of New Haven, Connecticut in an SEC action. The action was adverse to a hedge fund that engaged in transactions with a related party fund accused of a Ponzi scheme. The issues involved analyzing several years of the fund’s books and records, tracing amounts through intercompany accounts, segregating supported transactions from unsupported, describing for the Court the condition of the fund’s books and records, along with other applicable accounting and financial reporting matters. The parties reached a settlement subsequent to the hearing.
Consultant in International Arbitration Proceeding
Provided forensic accounting advice to defense counsel in a post-acquisition purchase price dispute matter related to the acquisition of a group of global logistics companies. Reviewed the purchase price adjustment provisions set forth in the acquisition agreement, analyzed the closing balance sheet and related accounting judgments, and provided input regarding the impact of certain accounting judgments on various purchase price adjustment provisions including net working capital, net debt and material adverse change damages. Worked closely with counsel to help manage the discovery process and assisted in drafting pleadings submitted in the related international arbitration proceedings.
Expert Witness in Fidelity Bond Claim Litigation
Served as the expert witness in a fidelity bond claim litigation matter filed in the Supreme Court of the State of New York, County of New York. Tasks involved evaluating the plaintiff's expert opinion, analysis and support to determine if the records and approach provided a proper foundation to conclude that a defalcation occurred. Prepared an expert report detailing material omissions in the plaintiff's expert analysis and approach. Provided expert testimony at deposition. The Court issued a summary judgment opinion in favor of the defendant insurer based on an issue of contract interpretation ending the case before trial.
Valuation and Forensic Accounting Consultant in Delaware Chancery Court Matter
Engaged by the defendant, a publicly traded financial services company, in a shareholder class action lawsuit alleging improper actions and an inadequate share price related to the sale of the company. Analysis involved reviewing the company's accounting and financial reporting judgments, the sale negotiation process, the fairness opinions and critiquing the expert report produced by the plaintiffs. Provided comments and observations from our review to counsel for use in depositions and case strategy. Matter settled favorably prior to trial.
Consultant and Testifier in Hedge Fund Dispute
In a dispute between an investment industry professional and a hedge fund, prepared calculations of amounts due the individual for securing major accounts for the fund. Analysis included tracing account activities, reviewing invoices, analyzing domestic and international trading activity, and preparing a detailed financial model. Provided deposition and testimony before an American Arbitration Association panel. Panel determined our client was the prevailing party, awarding the client a multi-million judgment, attorneys fees and costs.
Forensic Accountants for Board Level Special Investigation
Engaged by legal counsel to a Special Committee of the Board of Directors for a publicly traded company to investigate alleged wrongdoing by company executives and improper payments to customers. Assignment involved the design and execution of detailed forensic accounting procedures based on the allegations and a risk assessment approach to identify suspicious transactions and transfers of value from the company. Initial project scope was expanded to include an assessment of revenue recognition policies, various financial reporting matters and internal control issues. Communications included presentations and interactions with the Special Committee, the full Board of Directors, as well as the United States Attorney's Office, the FBI and the SEC.
Rebuttal Expert to State Attorney General Civil Fraud Claims
Engaged by legal counsel for an investment industry professional accused by a state attorney general of making kickbacks and illegal payments to state pension fund employees to assess whether allegations against the accused and the various entities under his control were based on a proper forensic accounting foundation of facts and analysis. We also reviewed the accounting and financial records of the accused to determine whether this information affirms in any way the substance of the attorney general's claims that the investment industry professional bribed state pension fund employees. Provided an expert declaration identifying flaws in the attorney general's analysis due to reliance on an incomplete set of accounting records, inadequate forensic accounting procedures, overzealous language and characterizations and a lack of understanding as to how a family business enterprise operates.
Consultant on Credit Crisis Financial Reporting Matters
Advised counsel defending a securities fraud claim brought against the directors and officers of a public financial services company, alleging improper timing for the credit crisis related assets losses. Our services involved assessing, researching and consulting pertaining to the relevant accounting guidance, the required financial statement disclosures, fair value issues, auditor responsibilities; in addition to the industry practices at various points in time including the evolution in guidance. The matter was successfully settled.
Financial Reporting and Damages Expert in a Post-Acquisition Dispute
Served as the expert consultant for the defendants in a post-acquisition dispute between the acquiring private equity firm and the selling shareholders for a construction industry distribution company. The engagement involved reviewing the plaintiffs' claims along with underlying support for purported working capital shortages and their alleged damage calculations. Prepared rebuttal items for the plaintiffs' claims revealing material flaws in the damage theory based on the acquirer's financial reporting assertions while at the time in control of the business. Appeared at mediation on behalf of the defendants and matter resolved favorably to defendants.
Restatement Process Expert Witness for a Foreign Private Issuer
Issued an expert report in the District Court of Tel-Aviv on behalf of the defendants in a matter related to the restatement process for a foreign private issuer. The report was in response to allegations of intentional delay with regards to the completion of restated financial statements. Subsequent to the delivery of our expert report, related pleadings and affidavits, the court dismissed the plaintiffs' case.
Independent Valuation Referee in Partnership Breakup
Served as an independent valuation and business expert in the breakup of a construction industry related business. Project involved interviewing owners, evaluating the company's historical performance, industry research, selection of most appropriate valuation methodologies and the delivery of a report detailing our conclusions and recommendations for the shareholders.
Defense of Criminal Securities Fraud Allegations
Served as the forensic accountant to the joint defense group for three former officers of a technology company charged with twenty-two counts of securities fraud involving revenue recognition, reserve and other accounting errors. Several week trial resulted in a hung jury and subsequent dismissal of charges for two of the defendants on double jeopardy grounds and a non-incarceratory plea for the third defendant.
Aerospace Industry Post Acquisition Dispute Accounting Advisor
Assisted counsel for a joint venture of two prominent private equity firms in assessing their claims as well as the claims against them in a post acquisition dispute over the closing working capital resulting from the sale an aerospace business. Services included conducting a mock arbitration, providing feedback to counsel on the joint venture positions and assistance in the preparation of the brief and reply brief filed in the arbitration. Judgment rendered in favor of the joint venture.
Expert Witness on the Restatement of an Oil and Gas Services Provider
Served as the expert witness on financial restatement timing and process matters on behalf of a oil and gas services provider in a matter filed by it's former chief operating office alleging delays in the restatement process caused harmed to the individual by delaying his ability to exercise stock options. Deposition testimony provided and case settled satisfactorily to the company prior to trial.
Forensic Accounting Consultant on Material Adverse Change Issues
Acted as the forensic accounting consultant for a large public media solutions corporation in a material adverse change action arising out of a proposed acquisition. The case involved claims for fraud and breach of contract and was filed in the Delaware Chancery Court. During the trial, the case settled favorably for the client with a reduction in purchase price in excess of one hundred million dollars.
Healthcare Audit Committee Investigation
On behalf of counsel to the audit committee of a multi billion dollar healthcare provider, performed a review of possible internal control errors and possible inaccurate billings. Project involved interviews, detailed controls documentation and testing, use of electronic data mining and analysis, and the presentation of findings and recommendations for improvements .
Accounting Referee for an Internet Services Provider Earn Out Dispute
Served as the accounting referee in a post acquisition earn out dispute involving interpretations and applications of accounting terminology to a formula approach payout of additional consideration. Services included defining the process, conducting proceedings with counsel and their clients and providing a live presentation of the opinions and the decision criteria for several contested items.
Special Committee Investigation at a Government Sponsored Enterprise
Planned and organized the forensic accounting investigation at a major government sponsored enterprise working for a major law firm and the Special Committee of the Board of Directors and with counsel, reporting updates to several government agencies in the early stages of the project. Investigation involved numerous alleged accounting errors.
Post Acquisition Dispute Expert Witness
Served as the expert witness for the acquirer of a consumer goods manufacturer in a dispute over the treatment of capitalized overhead. Submitted an affirmative expert report as well as rebuttal commentary on the opposing side's expert's analysis and opinion. Arbitrator ruled in favor of our opinion and referred to our expert report as "creditable and convincing".
Troubled Real Estate Company Accounting Investigation
On behalf of a major financial institution, conducted a forensic accounting investigation of a real estate developer and manager including the analysis of related party transactions and other payments. Reported results to the bank for use in financing and workout decisions.
Reconstruction of Public Software Company Accounting Records and Financial Statements
Engaged by counsel to a public software company to assess the revenue recognition of an acquired software business. Based on identified revenue recognition problems, a massive reconstruction and three year restatement was required. Led project team in organizing and restating the financial statements, presented to the SEC and assisted in subsequent litigation and regulatory actions.
Telecommunications Company Restatement
Assisted management of a public telecommunications company with a multiple year restatement of financial results for revenue recognition errors. Assisted management in responding to auditor requests. Assisted company counsel with defense of class action litigation arising out of the restatement. Presented results to the SEC.
Broker Dealer Special Investigation
On behalf of counsel to the audit committee of a broker dealer, investigated allegations of inappropriate trading activities. Investigation focused on error account activities and controls Reported results to counsel.
Expert Witness Related to Insurance Company Demutualization Calculation
Served as the expert witness in a dispute between a major mutual insurance company and one of its largest policyholders, over the policy holder's participation in the demutualization. Testified at deposition. Matter settled subsequent to favorable summary judgment decision .
Expert Assistance in Healthcare Company Restatement Class Action Defense
Engaged by counsel to provide an expert opinion on the proper revenue recognition for Medicare billings following a settlement with the government over alleged billing errors Issues involved the appropriate accounting for revenue considering previously established reserves, an evolving business model and regulatory changes. Performed expert analysis that was ultimately used to settle the case.
Forensic Accounting Investigation of Real Estate Developer and Related Parties
Engaged by counsel for a major Japanese finance entity to review the books and records of a real estate developer, with a focus on related party transactions and appropriateness of payments to owners. Reported results to counsel.
Expert Testimony over Telecommunications Entity Interim Operating Agreement
Provided expert testimony at deposition and trial related to the results of a telecommunications company operating under an interim operating agreement reflecting a cash basis of accounting. The company was operating under the agreement while it waited for regulatory approval from the Federal Communication Commission for its acquisition by another telecommunications company. Court ruled for the accrual basis of accounting as the parties intended method.
Independent Financial Policies Advisor Under an SEC Cease and Desist Order
Acted as the advisor to the Independent Financial Policies Consultant under an SEC Order for a public registrant. Procedures involved assessing the internal controls and making recommendations related to revenue recognition procedures. Report issued to the audit committee with a copy to the SEC.