How our Forensic Accounting Firm can save the world and settle your case
Video Transcript
When I started my career in accounting many years ago there was no such thing as a forensic accountant. ❓ When I started my firm, I would go door-to-door visiting law firms to explain that I was a forensic accountant and could assist them with litigation, valuations, financial disputes and other matters. Initially they did not understand what I was talking about. I had to explain that I would work a file for free, so they could have a better understanding of how my firm would help them successfully settle cases. ❗ The most important advice I would give attorneys and litigants, is to have a forensic accountant involved as early as possible. Especially if the objective is to help the client and win the case. 👉 Generally, our firm can be helpful in two specific areas, litigation support and investigations. The breakdown for our services is as follows: ➡️ Foundational: The importance of getting involved early is that we can help to better understand the case, assist with defining the financial framework, assess the quality of documents and other relevant data. Apply our background in gathering, analyzing and discovery of hidden assets and/or liabilities. ➡️ Interpersonal: Discuss document collection, background research and interview key personnel. ➡️ Data collection and analysis: We can help obtain information that will be very useful for preparation of interrogatories, depositions and help develop a trial strategy. ➡️ Preparation of expert reports and testimony at trial: As independent experts we have the ability to prepare reports, testify, give depositions and assist the trier of fact in understanding key elements of the business. We can also be a tremendous help in assessing the other sides experts and reviewing the reports. ⚡️ Forensic Accounting Case Study In order to help you understand more how our forensic accounting firm can help your litigation, I will walk you through an actual case that our firm was recently retained and testified as experts at trial. 📌 Background The case started out as a shareholder dispute between two shareholders who capitalized the business and each owned 50% of the shares. They owned a regional manufacturing company based in northern New Jersey. The company was started six years ago between two inventors who invented a new way to clean and purify wastewater. The company struggled for the first few years but eventually took off and became one of the top-selling wastewater purifier companies in the country. Their main product sold both nationally and internationally. Unfortunately, one of the shareholders became preoccupied with another business and spent little or no time at the company. The other shareholder became sick and was unable to work the long hours required. His daughter “Mary” eventually came into the business and took over. Mary was largely responsible for the day-to-day activities, including overseeing all key areas within the business; management of employees, accounting, finance, sales and operations, etc. Mary’s father eventually gifted her 50% of the shares and she “allegedly” bought an additional 10% from the other shareholder. The company continued to grow and became unexpectedly successful in the wastewater treatment business. This resulted in the increase in the value of the company stock. Eventually the remaining shareholder demanded more capital distributions, increased expense account and other perquisites. As Mary was doing all the work a dispute between the two shareholders developed. 📌 The Litigation Eventually, a lawsuit started and it was decided that Mary would buyout the 40% interest of the other shareholder. By the time our firm was brought into the litigation it had been ongoing for over five years. The first thing we did was review all the legal documents including the Complainant Interrogatories, Depositions, etc. and determine the status of the case. We also interviewed the attorneys and our client. It became quite clear that the problem was that neither side knew what they were fighting over as there was never a value placed on the company. They did not know if they were fighting over $300,000 or $3,000,000. We recommended that they allow us to prepare a valuation of the business so we could determine what they were fighting over. After doing extensive industry research on their products, preparing financial analysis of the results of the business for five years and projections, we had a good understanding of the financial picture of the business. 👉 For more information on our forensic accounting services, contact me below or visit our website: https://www.rabcpafirm.com/practices/…