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Articles

We have compiled a library of articles written by the professionals of Mercer Capital. This library contains our most recent articles, as well as older pieces for your information.

Bankruptcy & Restructuring

These articles feature relevant and useful advice on a range of strategic matters related to the bankruptcy and restructuring process.

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Latest Article

Fresh Start Accounting Valuation Considerations: Measuring the Reorganization Value of Identifiable Intangible Assets

The valuation techniques for identifiable intangible assets are rooted in the fundamental elements of business valuation, cash flow and risk, under the cost, market, and income approaches. However, when valuing identifiable intangible assets, we use valuation methods adapted to the unique attributes of those assets.

Buy-Sell Agreements

Mercer Capital is the leading provider of buy-sell agreement valuation services in the nation. Business owners, attorneys, and other business advisors who are either subject to a buy-sell or shareholder agreement or draft these agreements will find the content here helpful.
 

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Latest Article

Observations from a Buy-Sell Agreement Gone Bad

In the case of Connelly v. United States, a roofing and siding materials company, Crown C Supply Company, Inc., faces a complex legal and financial challenge following the death of one of its major shareholders. The dispute centers on whether life insurance proceeds should be included in the company's equity value for buyout purposes, a decision with significant implications for the valuation of shares and the financial future of the company. This case, now headed to the Supreme Court, highlights the critical importance of clear buy/sell agreements and the role of life insurance in shareholder buyouts, offering essential insights for businesses navigating similar transitions.

Case Review

Reviews of Tax Court and other court cases addressing valuation issues of importance to shareholders and professional advisors to business are contained here.

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Latest Article

Estate of Michael J. Jackson v. Commissioner – Key Takeaways

It is imperative for estate planners to engage valuation analysts that perform the proper procedures and follow best practices when performing valuations for gift and estate planning purposes. It is necessary to have a well-supported valuation because these reports are scrutinized by the IRS and may end up going to court. The recent decision by the U.S. Tax Court in Estate of Michael J. Jackson v. Commissioner provides several lessons and reminders for valuation analysts, and those that engage valuation analysts, to keep in mind when performing valuations for gift and estate planning purposes.

Corporate Valuation

Corporate valuation articles cover a broad range of topics of interest to business owners and their professional advisors.

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Latest Article

Valuation Considerations in Bankruptcy Proceedings

The outbreak of COVID-19 in the United States has caused a severe public health crisis and an unprecedented level of economic disruption. We discuss the key valuation-related steps of a Chapter 11 restructuring.

ESOPs

Mercer Capital understands ESOPs because we are an ESOP-owned firm. Articles included are written for Trustees and other professional advisors to ESOP companies and address a broad range of ESOP valuation issues.

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Latest Article

Analyzing Financial Projections as Part of the ESOP Fiduciary Process | Appraisal Review Practice Aid for ESOP Trustees

In recent years there has been increasing concern among ESOP sponsors and professional advisors (trustees, TPAs, business appraisers, legal counsel) regarding the scrutiny of the DOL, the Employee Benefits Security Administration (“EBSA”), and the Internal Revenue Service (“IRS”). These entities (and agencies thereof) are tasked with ensuring that ESOPs comply with the Employee Retirement Income Security Act (“ERISA”) as well as with various provisions of the federal income tax code concerning qualified retirement plans (including ESOPs). Citing concerns for poor quality and inconsistency in business appraisals, the DOL has sought in recent years to expand the meaning of “fiduciary” under ERISA to include business appraisers. In this article, Timothy R. Lee focuses on the use of financial projections in ESOP valuations. The use (or misuse) of financial projections is often the most direct cause of over- or under-valuation in ESOPs.

Family Business Advisory

Mercer Capital provides financial education services and other strategic financial consulting to family businesses

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Latest Article

What Does the Step-Up in Basis Tax Proposal Mean for High Net Worth Individuals and Family Businesses?

The potential elimination of the step-up in basis presents an estate planning opportunity to high-net worth individuals and family business owners or should at least spur them to contemplate revisiting their estate plans.

Financial Institutions Articles

Focusing primarily on banks, the articles contained here cover a wide array of topics, including valuation basics, financial reporting issues, transaction issues, and industry commentary.

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Latest Article

NYCB Incurs Heavy Dilution in Its $1.0 Billion Capital Raise

An investor group, led by former Secretary of the treasury Steve Mnuchin, invested $1.05 billion in New York Community Bank following a surprise Q4 loss. The investment was necessary to boost capital and shore up confidence. Learn more about the transaction and our thoughts on it through the links provided.

Financial Reporting Valuation

We have broad experience with fair value issues related to public and private companies, financial institutions, private equity firms, start-up enterprises, and other closely held businesses. CFOs, controllers, and auditors, among others, will find the articles here useful.

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Latest Article

Pay Versus Performance: What’s New in Year 2?

The SEC’s Pay Versus Performance disclosure rules introduced significant new valuation requirements related to equity-based compensation paid to company executives. As the 2024 proxy season gets underway, what lessons have been learned and what guidance has the SEC provided to registrants? We discuss some of the SEC’s recent Compliance & Disclosure Interpretations and share some best practices as companies gear up for Year 2 of the new Pay Versus Performance framework.

Industry-Related

Mercer Capital’s industry articles cover a broad range of topics of interest to business owners and their professional advisors.

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Latest Article

2024: Five Trends to Watch in the Medical Device Industry

This article outlines five structural factors and trends that influence demand and supply of medical devices and related procedures in 2024.

Litigation Support

Mercer Capital brings over 30 years of experience to the field of dispute analysis and litigation support. These articles are written to assist attorneys and other stakeholders when facing a dispute.

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Latest Article

Essential Financial Documents to Gather During Divorce – Part 3

In Parts 1 and 2 of this series, we discussed the importance of hiring an expert and the documents needed to prepare the marital balance sheet and analyzing support and need in a Lifestyle Analysis. This month, we discuss the documents needed for performing a business valuation, the core competency of Mercer Capital. There are many unique considerations and complexities to business valuation in divorce, often requiring more documentation and analyses. This includes personal goodwill, owner/operator compensation for valuation and income division purposes, formula clauses in Buy-Sell Agreements, and active vs passive, among others.

Tax Compliance

Mercer Capital has been providing objective valuations for tax compliance since 1982. Estate planners, business owners, and other professional advisors will find these articles of interest.

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Latest Article

Charting the Course of the Build Back Better Bill

By this Thanksgiving, Congress hopes to pass two of the largest bills in American history, the $1.2 trillion infrastructure bill (which was signed into law by President Biden on November 15th) along with a $1.75 trillion Build Back Better bill. While the infrastructure bill made it through Congress with minimal tax hikes, the passing of the larger reconciliation bill may still create sweeping changes to American tax policy, specific to high-net-worth individuals. This article summarizes what is in the Build Back Better bill and what it might mean for taxpayers.

Transaction Advisory

Mercer Capital has been successfully executing mergers & acquisitions for a broad spectrum of middle-market companies since the mid-1980s, as well as providing fairness opinions and other transaction-related consulting services. The articles here address topics of interest to business owners who are seeking to transition their businesses and to shareholders interested in transaction issues.

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Latest Article

What to Look For in a Quality of Earnings Provider

The cost of corporate M&A failures is high for both buyers and sellers. These high stakes mean that thorough and high-quality due diligence is critical.  A Quality of Earnings (or QofE) analysis is an essential component of transaction diligence for both buyers and sellers.  Optimizing your transaction diligence requires assembling the right team. In this article, we discuss four things buyers and sellers should look for when evaluating potential QofE providers.