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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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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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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

Supreme Court Upholds Connelly

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.

Corporate Valuation

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

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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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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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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

Moo Deng’s Post-Election Outlook for the Banking Industry

The U.S. presidential election triggered a strong rally in bank stocks, with investors expecting banks to benefit from deregulation, greater economic growth, and M&A. While professional pollsters may have missed the mark, the election result was accurately predicted by Moo Deng, a baby pygmy hippo that has achieved celebrity status. Given her clairvoyance, who better to offer her outlook for the banking industry over the next four years?

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

What to Look for in a Purchase Price Allocation

Purchase price allocation is a critical step in the transaction reporting process under ASC 805. Future amortization expense, changes in the fair value of earnout liabilities, and even goodwill impairment testing all depend on the outcome of the initial allocation. This article will provide an overview of the PPA process, discuss common intangible assets, and review some best practices and potential pitfalls.

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

Anatomy of Volatility: Evolent (EVH)

In this article we report on the price volatility of Evolent Health, Inc. (EVH) in recent quarters.

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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Expanding Reach and Elevating Expertise

As the holiday season is upon us, and with Thanksgiving around the corner, I would be remiss not to reflect and share highlights from a bustling fall season at Mercer Capital. We are very grateful and thankful for the experiences, opportunities, and interactions with many of you!

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

Evolving Need for Estate Planning Amid Legislative Shifts

The 2024 elections delivered a Republican sweep of the Presidency and Congress, setting the stage for potential tax policy changes. The likely extension of tax provisions from the 2017 Tax Cuts and Jobs Act, which are currently set to expire on January 1, 2026 is central to the uncertainty. The potential ten-year maximum extension would include maintaining the elevated estate and gift tax lifetime exclusion amount of $10 million, indexed for inflation ($13.99 million in 2025). However, legislative realities may lead to a shorter extension than ten years or even modifications to the exemption altogether. In this article written shortly after the 2024 presidential election, we outline possible changes to tax policy and the need for continued estate planning.

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

Richard Fuld, Spirit Airlines, and Fairness

Spirit Airlines filed for bankruptcy on November 18, 2024. We will see creditors take control of the company after a nearly two-year saga involving Frontier Airlines, JetBlue and the Department of Justice successfully suing to block the proposed merger with JetBlue. Hindsight is easy, but the Spirit board made a disastrous decision like Richard Fuld in attempting to strike a better deal when the market signaled otherwise.

Update
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Latest Article

Supreme Court Upholds Connelly

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.