The estate planning world is keenly focused on the SCOTUS decision in Connelly. Does the decision render entity-purchased life insurance useless, or at least, less useful than before? At the very least, in light of this ruling, every buy-sell agreement funded by life insurance should be reviewed by competent legal and tax counsel to ensure that the agreements operate as planned when triggered. For more information about the ruling, read Chris Mercer’s informative article.
This article discusses important concepts of personal vs. enterprise goodwill in valuations for divorce. It is important to understand the business, industry, and efforts of the divorcing spouse(s) & non-divorcing parties to perform a thorough, supportable analysis. It is also important to know how each state treats personal goodwill – some states consider personal goodwill to be a separate asset, and some do not make a specific distinction for it and include it in the marital assets. Additionally, while there are several accepted methodologies for determining % allocations to personal vs. enterprise, there are not uniform standards nor guidelines that govern the how-to’s; as such these analyses are complex and require subject matter expertise.
A quality of earnings (“QoE”) report and an audit are both essential tools in the business world, but they serve distinct purposes and offer varying insights. Audits are broader and regulatory in nature, whereas QoE analyses are more focused and strategic, catering to the needs of investors and decision-makers who require a deeper understanding of a company’s true financial health and future potential.
We were proud to sponsor and attend the AAML’s inaugural National Family Law Conference in Nashville, Tennessee on May 16-18, 2024. As usual, the sessions and attendees did not disappoint. Our biggest takeaway was that successful cases include the right recipe: the right attorney and the right expert – essentially, the right team. In this article we discuss some of our takeaways from this years AAML Family Law Conference.
Rising regulatory burdens contributed to the stunning growth in private equity the last two decades and private credit in recent years. PE investors ultimately require liquidity, however. Subdued M&A and IPO markets since mid-2022 have spurred growth for private equity secondaries, which mostly consists of GP-initiated transactions for continuation funds and LP-initiated transactions for portfolio interests.
In March 2024, the Financial Accounting Standards Board (FASB) issued ASU 2024-01, which clarifies the accounting treatment of profits interest awards. This move aims to enhance the consistency and understanding of Generally Accepted Accounting Principles (GAAP) related to such awards. The ASU update helps entities ascertain whether certain awards need to be measured at fair value under ASC 718 or if they should be accounted for under other guidance. In this article, we summarize the new FASB guidance and discuss common methods for valuing profits interests under ASC 718.
Banks have been divesting their insurance subsidiaries at favorable valuations over the past decade, driven by factors such as higher capital requirements, lower returns compared to public insurance brokers, and increased private equity interest in insurance agencies. This has allowed banks to redeploy capital, improve capital ratios, and focus on their core banking business.
Previously in this series, we discussed the importance of hiring an expert and the documents needed to prepare the marital balance sheet, analyze support and need in a Lifestyle Analysis (aka Pay & Need Analysis), and perform a business valuation. This month, we conclude our series with the documents needed for other forensics services and valuation services. In this post, we discuss documents for arithmetic determinations of separate vs. marital, active vs. passive, and asset tracing. The appraiser/financial expert does not render legal opinions, though, assists with quantifying complex financial issues, while being aware of statutory and case law in varying jurisdictions.
The FTC has updated its rulings concerning the enforceability of noncompete agreements while also making significant allowances for agreements arising from transactions. The elimination of noncompete agreements will shift some value from identifiable, amortizable assets to goodwill and may influence the attrition rates used to calculate the value of customer-related assets. The new ruling is expected to be met with substantial litigation before it becomes effective.
With rising inflation and interest rates, bank investors are facing challenges as stocks are underperforming in the market. As a result, it may be an opportune time for bank investors to consider estate planning opportunities to transfer business value to future generations. The sunsetting of favorable estate tax provisions in 2025 makes it even more important to consider estate planning strategies now.
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.
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.
This article outlines five structural factors and trends that influence demand and supply of medical devices and related procedures in 2024.
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.
The proposed merger between Capital One and Discover could shake up the global payments industry. If approved, it would make Capital One the largest credit card company based on loan volume and third largest based on purchase volume. The deal could also lead to better rewards programs and physical presence for customers, but regulatory hurdles remain.
The recent collapse of the Francis Scott Key Bridge, a crucial link for the Port of Baltimore, is the most recent upheaval in the logistics industry amidst a series of global disruptions. This incident not only underscores the vulnerability of supply chains to unforeseen events but also signals potential short-term delays and long-term shifts in cargo distribution across East Coast ports. As the transportation and logistics industry navigates these challenges, including labor disputes and global events affecting cargo routes, the implications of this collapse extend beyond immediate disruptions and will shape the future landscape of international trade and transportation.
In Part 1 of this series, we discussed the importance of hiring an expert and the documents needed to prepare the marital balance sheet including tax returns and a personal financial statement. In Part 2 we discuss the documents needed for analyzing support and need, otherwise known as a Lifestyle Analysis or a Pay and Need Analysis.
M&A deal flow was sidelined for much of 2022 and 2023, but the economy’s soft landing, stabilizing interest rates, and pent-up M&A demand are expected to compel buyers and sellers to renew their efforts in 2024 and beyond. As deal activity recovers, sellers need to be prepared to present their value proposition in a compelling manner.
For many sellers, an independent Quality of Earnings (“QofE”) analysis and report are vital to advancing and defending their asset’s value in the marketplace. And it can be critical to the ensuing due diligence processes buyers apply to targets.
In this article, we review five reasons sellers benefit from a QofE report when responding to an acquisition offer or in preparing to take their businesses to market.
The ongoing battle between East Coast and West Coast ports is making waves in the logistics industry. Recent events like the El Niño weather event and attacks on vessels in the Red Sea have impacted marine logistics and transit times. The overall impact of these events remains to be seen, but it highlights the importance of keeping up with reshoring and nearshoring trends in the industry.
The 2024 Acquire or Be Acquired conference saw discussions on traditional bank M&A, managing balance sheets, growing deposits, and leveraging technology. There was cautious optimism for an uptick in deal activity in the second half of the year. In this article we recap a few themes from this year’s conference.
In prior posts, we have written about the benefits of hiring an expert in family law cases, whether it’s expected to settle or go to trial. In part 1 of this 3 part series, we provide you with a resource that will assist you and your clients during one of the most difficult times in their lives, divorce. We have compiled a list of financial documents that are typically needed in the divorce process and decoded common financial terms helpful to attorneys and their clients.
In 2024, as the prospect of Fed rate cuts begins to attract buyers back into the market after a period of caution in 2022 and 2023, the importance of thorough due diligence cannot be overstated.
Management should pay close attention to the crucial role that a Quality of Earnings (“QofE”) report can play in their acquisition decisions.
From uncovering sustainable earnings and identifying cost-saving potentials to understanding revenue synergies and assessing capital needs, a comprehensive QofE report emerges as an indispensable tool for business directors aiming to navigate the complexities of acquisitions with confidence and strategic insight.
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.
Over the past decade stock-based compensation (SBC) gained widespread popularity as a way to reward employees while conserving cash. In this article, we discuss how market volatility can affect employee, management, and investor perspectives on Stock Based Compensation.