Timothy R. Lee, ASA, Managing Director, moderated an educational session on the importance of due diligence regarding financial projections at the ESOP Association’s 2017 Las Vegas ESOP Conference & Trade Show. Phillip Chou, managing director at AmbroseAdvisors, and Erin Hollis, ASA, CDBV, director of Dispute Resolution & Litigation Support at Marshall & Stevens, Inc., were co-presenters alongside Tim.
A description of the session is below:
Management’s financial projections are a key input into the analyses underlying ESOP fairness opinions and annual appraisal reports. Furthermore, the DOL Process Agreement highlighted the importance of thoroughly evaluating management’s financial projections. This session will review methods and procedures that fiduciaries and valuation professionals can use to evaluate the reasonableness of projections as part of the valuation process. Furthermore, the panel will address the importance of obtaining sufficient industry-related information and/or employing outside experts when dealing with industry-specific nuances. Finally, panel will address the feasibility of a quality of earning (Q of E) report, and what alternatives may be available in connection with the financial due diligence process.
