There are a number of other areas where Financial Forensics experts can assist that may not be as obvious. Here are just of few examples from my recent experience:
- Shareholder or Partnership Litigation – Outside the traditional values needed to compensate a departing partner, there are often accusations of fraud, misappropriation of funds, loss of corporate opportunities and a host of other issues that lawyers frequently encounter, but don’t involve the financial expert early enough.
- Alter Ego Analysis – Involves analyzing the (likely near bankrupt) company that may have breached the
contract orcommitted the tort for undercapitalization (while being subsidized by an entity under common control), transfers between related entities, commingling of assets, operations, or personnel, following corporate formalities, documentation of intercompany loan agreements, analysis of deals to determine if they are on an arm’s length basis and other similar activities designed to determine if there is the potential to “pierce the corporate veil” and have defendants with the ability to pay damages
- Fraud Prevention – Certified Fraud Examiners are trained to go into company and assess the risk of fraud, looking throughout the company processes, from payroll to accounts payable and receivable, procurement, sales, company credit cards, cash management procedures and other areas as applicable to the business, also working with management to recognize the red flags of fraud early.
- Class Action Certification / Claims analysis – often involves the analysis of large data sets to determine empirically whether the potential claims of the plaintiffs are similar to warrant class certification
- Ability to pay punitive damages – form an opinion as to whether and how much the defendant has the ability to pay based upon the prevailing criteria of the jurisdiction
- Valuation of Stock Options / Restricted Stock in private companies – often associated with marital dissolution cases, but this is a specialized area with complex calculations that require a great deal of backup data from proprietary databases, especially when start-up companies are involved
- Intellectual Property Valuation – Utilized for purchase price allocation for financial accounting purposes, but also can be a measure of value or damages in marital dissolution, shareholder disputes, or many forms of civil litigation
If you think you might need the help of a financial forensics expert, please call 918-814-2309 or e-mail [email protected].