Lance Wallach Business Valuations - YouTube
Showing posts with label Business. Show all posts
Showing posts with label Business. Show all posts
Investment News- Business Valuations
- Investment News-Business Valuations
For years, advisors and insurance brokers have sold the 412(i) plan, a type of defined-benefit pension plan, and the 419 plan, a health and welfare plan, to small businesses as a way of providing such benefits to their employees, while also receiving a tax break.
However, in 2004, Congress changed the law to require that companies file with the Internal Revenue Service if they had these plans in place. The law change was intended to address tax shelters, particularly those set up by large companies.
Many companies and financial advisors didn't realize that this was a cause for concern, however, and now employers are receiving a great deal of scrutiny from the federal government, according to experts.
The IRS has been aggressive in auditing these plans. The fines for failing to notify the agency about them are $200,000 per business per year the plan has been in place and $100,000 per individual.
Small business retirement plans fuel litigation
Dolan Media Newswires
The penalties for such transactions are extremely high and can pile up quickly - $100,000 per individual and $200,000 per entity per tax year for each failure to disclose the transaction - often exceeding the disallowed taxes.
There are business owners who owe $6,000 in taxes but have been assessed $1.2 million in penalties. The existing cases involve many types of businesses, including doctors' offices, dental practices, grocery store owners, mortgage companies and restaurant owners. Some are trying to negotiate with the IRS. Others are not waiting. A class action has been filed and cases in several states are ongoing. The business owners claim that they were targeted by insurance companies; and their agents to purchase the plans without any disclosure that the IRS viewed the plans as abusive tax shelters. Other defendants include financial advisors who recommended the plans, accountants who failed to fill out required tax forms and law firms that drafted opinion letters legitimizing the plans, which were used as marketing tools.
A 412(i) plan is a form of defined benefit pension plan. A 419(e) plan is a similar type of health and benefits plan. Typically, these were sold to small, privately held businesses with fewer than 20 employees and several million dollars in gross revenues. What distinguished a legitimate plan from the plans at issue were the life insurance policies used to fund them. The employer would make large cash contributions in the form of insurance premiums, deducting the entire amounts. The insurance policy was designed to have a "springing cash value," meaning that for the first 5-7 years it would have a near-zero cash value, and then spring up in value.
Just before it sprung, the owner would purchase the policy from the trust at the low cash value, thus making a tax-free transaction. After the cash value shot up, the owner could take tax-free loans against it. Meanwhile, the insurance agents collected exorbitant commissions on the premiums - 80 to 110 percent of the first year's premium, which could exceed $1 million.
Technically, the IRS's problems with the plans were that the "springing cash" structure disqualified them from being 412(i) plans and that the premiums, which dwarfed any payout to a beneficiary, violated incidental death benefit rules.
Under §6707A of the Internal Revenue Code, once the IRS flags something as an abusive tax shelter, or "listed transaction," penalties are imposed per year for each failure to disclose it. Another allegation is that businesses weren't told that they had to file Form 8886, which discloses a listed transaction.
According to Lance Wallach of Plainview, N.Y. (516-938-5007), who testifies as an expert in cases involving the plans, the vast majority of accountants either did not file the forms for their clients or did not fill them out correctly.
Because the IRS did not begin to focus audits on these types of plans until some years after they became listed transactions, the penalties have already stacked up by the time of the audits.
Another reason plaintiffs are going to court is that there are few alternatives - the penalties are not appealable and must be paid before filing an administrative claim for a refund.
The suits allege misrepresentation, fraud and other consumer claims. "In street language, they lied," said Peter Losavio, a plaintiffs' attorney in Baton Rouge, La., who is investigating several cases. So far they have had mixed results. Losavio said that the strength of an individual case would depend on the disclosures made and what the sellers knew or should have known about the risks.
In 2004, the IRS issued notices and revenue rulings indicating that the plans were listed transactions. But plaintiffs' lawyers allege that there were earlier signs that the plans ran afoul of the tax laws, evidenced by the fact that the IRS is auditing plans that existed before 2004.
"Insurance companies were aware this was dancing a tightrope," said William Noll, a tax attorney in Malvern, Pa. "These plans were being scrutinized by the IRS at the same time they were being promoted, but there wasn't any disclosure of the scrutiny to unwitting customers."
A defense attorney, who represents benefits professionals in pending lawsuits, said the main defense is that the plans complied with the regulations at the time and that "nobody can predict the future."
An employee benefits attorney who has settled several cases against insurance companies, said that although the lost tax benefit is not recoverable, other damages include the hefty commissions - which in one of his cases amounted to $860,000 the first year - as well as the costs of handling the audit and filing amended tax returns.
Defying the individualized approach an attorney filed a class action in federal court against four insurance companies claiming that they were aware that since the 1980s the IRS had been calling the policies potentially abusive and that in 2002 the IRS gave lectures calling the plans not just abusive but "criminal." A judge dismissed the case against one of the insurers that sold 412(i) plans.
The court said that the plaintiffs failed to show the statements made by the insurance companies were fraudulent at the time they were made, because IRS statements prior to the revenue rulings indicated that the agency may or may not take the position that the plans were abusive. The attorney, whose suit also names law firm for its opinion letters approving the plans, will appeal the dismissal to the 5th Circuit.
In a case that survived a similar motion to dismiss, a small business owner is suing Hartford Insurance to recover a "seven-figure" sum in penalties and fees paid to the IRS. A trial is expected in August.
Small business retirement plans fuel litigation
Small businesses facing audits and potentially huge tax penalties over certain types of retirement plans are filing lawsuits against those who marketed, designed and sold the plans. The 412(i) and 419(e) plans were marketed in the past several years as a way for small business owners to set up retirement or welfare benefits plans while leveraging huge tax savings, but the IRS put them on a list of abusive tax shelters and has more recently focused audits on them.The penalties for such transactions are extremely high and can pile up quickly - $100,000 per individual and $200,000 per entity per tax year for each failure to disclose the transaction - often exceeding the disallowed taxes.
There are business owners who owe $6,000 in taxes but have been assessed $1.2 million in penalties. The existing cases involve many types of businesses, including doctors' offices, dental practices, grocery store owners, mortgage companies and restaurant owners. Some are trying to negotiate with the IRS. Others are not waiting. A class action has been filed and cases in several states are ongoing. The business owners claim that they were targeted by insurance companies; and their agents to purchase the plans without any disclosure that the IRS viewed the plans as abusive tax shelters. Other defendants include financial advisors who recommended the plans, accountants who failed to fill out required tax forms and law firms that drafted opinion letters legitimizing the plans, which were used as marketing tools.
A 412(i) plan is a form of defined benefit pension plan. A 419(e) plan is a similar type of health and benefits plan. Typically, these were sold to small, privately held businesses with fewer than 20 employees and several million dollars in gross revenues. What distinguished a legitimate plan from the plans at issue were the life insurance policies used to fund them. The employer would make large cash contributions in the form of insurance premiums, deducting the entire amounts. The insurance policy was designed to have a "springing cash value," meaning that for the first 5-7 years it would have a near-zero cash value, and then spring up in value.
Just before it sprung, the owner would purchase the policy from the trust at the low cash value, thus making a tax-free transaction. After the cash value shot up, the owner could take tax-free loans against it. Meanwhile, the insurance agents collected exorbitant commissions on the premiums - 80 to 110 percent of the first year's premium, which could exceed $1 million.
Technically, the IRS's problems with the plans were that the "springing cash" structure disqualified them from being 412(i) plans and that the premiums, which dwarfed any payout to a beneficiary, violated incidental death benefit rules.
Under §6707A of the Internal Revenue Code, once the IRS flags something as an abusive tax shelter, or "listed transaction," penalties are imposed per year for each failure to disclose it. Another allegation is that businesses weren't told that they had to file Form 8886, which discloses a listed transaction.
According to Lance Wallach of Plainview, N.Y. (516-938-5007), who testifies as an expert in cases involving the plans, the vast majority of accountants either did not file the forms for their clients or did not fill them out correctly.
Because the IRS did not begin to focus audits on these types of plans until some years after they became listed transactions, the penalties have already stacked up by the time of the audits.
Another reason plaintiffs are going to court is that there are few alternatives - the penalties are not appealable and must be paid before filing an administrative claim for a refund.
The suits allege misrepresentation, fraud and other consumer claims. "In street language, they lied," said Peter Losavio, a plaintiffs' attorney in Baton Rouge, La., who is investigating several cases. So far they have had mixed results. Losavio said that the strength of an individual case would depend on the disclosures made and what the sellers knew or should have known about the risks.
In 2004, the IRS issued notices and revenue rulings indicating that the plans were listed transactions. But plaintiffs' lawyers allege that there were earlier signs that the plans ran afoul of the tax laws, evidenced by the fact that the IRS is auditing plans that existed before 2004.
"Insurance companies were aware this was dancing a tightrope," said William Noll, a tax attorney in Malvern, Pa. "These plans were being scrutinized by the IRS at the same time they were being promoted, but there wasn't any disclosure of the scrutiny to unwitting customers."
A defense attorney, who represents benefits professionals in pending lawsuits, said the main defense is that the plans complied with the regulations at the time and that "nobody can predict the future."
An employee benefits attorney who has settled several cases against insurance companies, said that although the lost tax benefit is not recoverable, other damages include the hefty commissions - which in one of his cases amounted to $860,000 the first year - as well as the costs of handling the audit and filing amended tax returns.
Defying the individualized approach an attorney filed a class action in federal court against four insurance companies claiming that they were aware that since the 1980s the IRS had been calling the policies potentially abusive and that in 2002 the IRS gave lectures calling the plans not just abusive but "criminal." A judge dismissed the case against one of the insurers that sold 412(i) plans.
The court said that the plaintiffs failed to show the statements made by the insurance companies were fraudulent at the time they were made, because IRS statements prior to the revenue rulings indicated that the agency may or may not take the position that the plans were abusive. The attorney, whose suit also names law firm for its opinion letters approving the plans, will appeal the dismissal to the 5th Circuit.
In a case that survived a similar motion to dismiss, a small business owner is suing Hartford Insurance to recover a "seven-figure" sum in penalties and fees paid to the IRS. A trial is expected in August.
Last July, in response to a letter from members of Congress, the IRS put a moratorium on collection of §6707A penalties, but only in cases where the tax benefits were less than $100,000 per year for individuals and $200,000 for entities. That moratorium was recently extended until March 1, 2010.
But tax experts say the audits and penalties continue. "There's a bit of a disconnect between what members of Congress thought they meant by suspending collection and what is happening in practice. Clients are still getting bills and threats of liens," Wallach said.
"Thousands of business owners are being hit with million-dollar-plus fines. ... The audits are continuing and escalating. I just got four calls today," he said. A bill has been introduced in Congress to make the penalties less draconian, but nobody is expecting a magic bullet.
"From what we know, Congress is looking to make the penalties more proportionate to the tax benefit received instead of a fixed amount."
Lance Wallach can be reached at: LaWallach@aol.com- 516-938-5007- or www.vebaplan.com
Business Valuations
Lance Wallach - Online
The Business Valuation Resources shows guidance on performing valuations of closely held businesses and intangible assets, including an overview of the valuation process, the factors to consider before accepting the valuation engagement, and the many methods of valuation. Additionally, it includes tools and aids that would facilitate the business valuation process.
Business Valuations by Lance Wallach
Business Valuations by Lance Wallach
We are skilled at valuing small, owner-operated businesses with annual sales of less
than $5 million. Some of our valuations are related to the buying or
selling of a business, and are used to make critical decisions like: whether to buy or
sell, how much to offer or accept, and how much to lend. In these situations,
valuations must be realistic and reasonable to be of any value.
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How To Value A Young Company
Say you’re lucky enough to find a willing investor in your young company. At some point (sooner rather than later), the guy will want to know: “How much do I have to pay for a slice of the pie–and how big a slice can I get?”
Placing a valuation on young companies is a tricky, subjective game, but it’s one small-business owners have to know how to play, especially when investment capital remains stubbornly scarce. Quote too low a figure, and you’ll give away the store; shoot too high, and the investor may blanch at your grasp of the underlying economics of the business.
Here are three techniques, some broken into parts, to help you put a value on your company. Your best bet is an amalgam of all of them. When it comes to impressing investors, the more ways you can speak their language, the better.
Of all valuation approaches, the asset approach–placing dollar values on all the assets on a company’s balance sheet and adding them up–is the most concrete.
Start with physical assets, including machinery, office furniture, computers, inventory, prototypes (and the cost to develop them). Young companies tend not to have much in the way of physical assets, but add up what you do have.
Then move on to intellectual property. This includes patents, trademarks and even incorporation papers (because the company’s name is protected). This approach may seem squishy, but the dollar amounts are real. A (rough) rule of thumb often used by investors is that each patent filed might justify $1 million increase in valuation.
Next up are all principals and employees. The value of most companies is in their people. In the dot-com boom of the late 1990s, it was not uncommon to see valuations rise by $1 million for every paid full-time programmer, engineer or designer. Don’t forget to include the value of sweat equity–as in the theoretical salaries that would have been paid to founders and executives who didn’t take them.
Also, don’t forget the customer relationships. Every customer contract is worth something, even those still in negotiation. Assign probabilities to active customer sales efforts, just as sales managers do in quantifying their teams’ forecasts. Particularly valuable are recurring revenues, like subscriptions, that don’t have to be resold every period.
Technique No. 2: The Market Approach
Another way to look at valuation is by estimating a company’s earning potential based on theoretical demand in the market.
Start by estimating the size and growth of your addressable market. The bigger the market, and the higher the growth projections (ginned up by independent analysts), the more your start-up is potentially worth. For a young, asset-light company looking to attract deep-pocketed investors, the target market should be at least $500 million in potential sales; if your business requires plenty of property, plants and equipment, the addressable market should be at least $1 billion.
Next, assess the competition and determine the barriers to entry. The stiffer the competition, the lower your valuation. On the flip side, the more fortified your company against new challengers (based on factors such as location, contracts with key customers, first-mover advantage, etc.), the more it’s worth. These intangibles translate into what’s known as goodwill–the amount a buyer might pay for your company above the value of the assets on your balance sheet. Goodwill can well bump up a valuation by a few million dollars.
Third, look at other similar companies that have managed to raise money–an exercise not unlike appraising the value of your house by comparing it to similar homes recently sold in your area. A thorough news search on Google might get you pretty far when looking for comparable deals. There are also professional valuation consultants who can pitch in–for a price, of course.
Technique No. 3: Income Valuation
The method, used extensively by financial analysts, involves projecting a company’s future cash flows and discounting them, at some rate, to arrive at their value in present dollars. The discount rate applied to start-ups is typically steep–from 30% to 60%. The younger the company, and the greater the uncertainty of its future earning power, the larger the discount rate should be. (Note: In the case of very young, pre-revenue companies, this technique may not prove very useful.)
A variation on this approach involves tallying your company’s earnings before interest, taxes, depreciation and amortization (EBITDA, to finance types) and multiplying that figure by some reasonable factor. Calculating typical EBITDA multiples for publicly traded companies in your industry is easy: Just take their market capitalizations (easily found online) and divide by EBITDA.
If running all these numbers sounds like a bit of work, well, that’s true. But, then, would you rather give away the store?
Business Owners and Accountants Face Huge IRS Fines. Lance Wallach, expert witness.
The IRS is attacking people in retirement plans and so-called 419 plans that contain life insurance, and the consequences are very bad. The IRS has collected millions by calling various types of retirement plans, more specifically 412(i), plans listed transactions or similar to. They have also attacked all types of 419 plans.
If the business owner and accountant do not file various forms under section 6707A they will be fined at least $200,000. This fine can be eliminated simply by filing the appropriate forms properly. The second problem is that if the forms are not filled out exactly right or filed properly, the IRS is still assessing the fines. We have received a large number of calls for help from accountants, business owners and insurance agents in similar situations. Don’t think this will happen to you? It is happening to a lot of accountants and business owners, because most of these so called listed, abusive plans, or plans substantially similar to the so-called listed, abusive plans are currently being sold by most insurance agents currently. Bruce Hink, who has given me permission to utilize his name and circumstances, is a perfect example of what the IRS is doing to unsuspecting business owners. What follows is a story about Bruce Hink and how the IRS fined him $200,000 a year for being in what they called “a listed transaction”. In addition, I believe that the accountant who signed the tax return and the insurance agent who sold the retirement plan will each be fined $200,000 as material advisors.
In 2002, an insurance agent representing a 100 year-old well established insurance company suggested the owner Bruce Hink start a pension plan. The owner was given a portfolio of information from the insurance company, which was given to the company’s outside CPA to review and give an opinion on. The CPA gave the plan the green light and the plan was started for tax year 2002.
Contributions were made in 2003. Then the administrator came out with amendments to the plan, based on new IRS guidelines, in October of 2004.
The business owner’s agent disappeared in May of 2005 before implementing the new guidelines from the administrator with the insurance company. The business owner was left with a refund check from the insurance company, a deduction claim on his 2004 tax return that had not been applied, and without an agent.
It took 6 months of making calls to the insurance company to get a new insurance agent assigned. By then, the IRS had started an examination of the pension plan. Asking advice from the CPA and local attorney (who had no previous experience in such cases) made matters worse, with a “big name” law firm being recommended and over $30k in additional legal fees being billed in three months.
To make a long story short, the audit stretched on for over 2 ½ years to examine a 2 year old pension with 4 participates and $178,000 in contributions.
During the audit, no funds went to the insurance company, which was awaiting IRS approval on restructuring the plan as a traditional defined benefit plan, which the administrator had suggested and which IRS had indicated would be acceptable. The $90,000 2005 contribution was put into the company’s retirement bank account along with the 2004 contribution.
In March of 2008, the business owner received an apology from the IRS agent that headed the examination.
The IRS denied any appeal and ruled in October 2008 that the $400,000 penalty for 2003 and 2004 for not filing lender 6707A and notifying IRS of participating in a listed transaction would stand.
Could you or one of your clients be next?
Even this sympathetic IRS agent thinks there is a problem with the IRS enforcement of these Draconian penalties. Below is one of her emails to the business owner who was fined $400,000.
From: Kowalski Jean M
Date: Tue, Mar 4, 2008 at 7:12 AM
Subject: RE: Urgent
To: Bruce Hink
Thanks Bruce - yes - please just overnight them to the Grand Rapids address. Once again, I'm sorry about this. Basically, our Counsel told us that we needed language specific to the IRC 6707A penalty in order for that statute to be extended. I will ask the Reviewer to hold off an extra day.
I'm also very sorry that this is getting you down. Deeply sorry. It’s very difficult for me as well - before I started working this project (412(i)) I was doing audits of 401(k) and profit sharing plans. If there was an error in the plan, the employer would just fix it and the audit was over. There wasn't anything controversial or adversarial about it - and I felt like I was helping people - employers and plan participants. I really liked my job. In two years time, that has completely changed. I know it’s not very "professional" to make such confessions - so forgive me. But I guess I just wanted you to know that I really sympathize with your situation - and have been doing whatever I can to help. I know that having this hanging over your head can't be fun - but as this project goes forward - I think that the IRS is going to have to soften their position somewhat - so these delays may be to your benefit.
Also, I'm not really supposed to be sending emails to you - but when I went through the file I couldn't find a good phone number for you. Could you just send me a note or an email with a current phone number?
Looking to receive the signed 872s on Thursday. If you have any questions at any time - please call me. I'm usually in the office in the mornings.
As an expert witness Lance Wallach's side has never lost a case. People need to be careful of 419 Welfare Benefit Plans, 412i plans, Section 79 plans and Captive Insurance Plans. Most of these plans are sold by insurance agents. If you are in an abusive, listed or similar transaction plan you need to file under IRS 6707a. The participant files form 8886, and the salesmen or accountant who signs the tax returns files form 8918 if they got paid over $10,000. They are called Material Advisors and face a minimum $100,000 fine. Some plans are offshore which could involve FBAR or OVDI filings. If you have money overseas you probably need to file for IRS tax amnesty. If you want to reduce the tax we suggest that you first file and then opt out. For more information Google Lance Wallach.
The information provided herein is not intended as legal, accounting, financial or any other type of advice for any specific individual or other entity. You should contact an appropriate professional for any such advice.
If the business owner and accountant do not file various forms under section 6707A they will be fined at least $200,000. This fine can be eliminated simply by filing the appropriate forms properly. The second problem is that if the forms are not filled out exactly right or filed properly, the IRS is still assessing the fines. We have received a large number of calls for help from accountants, business owners and insurance agents in similar situations. Don’t think this will happen to you? It is happening to a lot of accountants and business owners, because most of these so called listed, abusive plans, or plans substantially similar to the so-called listed, abusive plans are currently being sold by most insurance agents currently. Bruce Hink, who has given me permission to utilize his name and circumstances, is a perfect example of what the IRS is doing to unsuspecting business owners. What follows is a story about Bruce Hink and how the IRS fined him $200,000 a year for being in what they called “a listed transaction”. In addition, I believe that the accountant who signed the tax return and the insurance agent who sold the retirement plan will each be fined $200,000 as material advisors.
In 2002, an insurance agent representing a 100 year-old well established insurance company suggested the owner Bruce Hink start a pension plan. The owner was given a portfolio of information from the insurance company, which was given to the company’s outside CPA to review and give an opinion on. The CPA gave the plan the green light and the plan was started for tax year 2002.
Contributions were made in 2003. Then the administrator came out with amendments to the plan, based on new IRS guidelines, in October of 2004.
The business owner’s agent disappeared in May of 2005 before implementing the new guidelines from the administrator with the insurance company. The business owner was left with a refund check from the insurance company, a deduction claim on his 2004 tax return that had not been applied, and without an agent.
It took 6 months of making calls to the insurance company to get a new insurance agent assigned. By then, the IRS had started an examination of the pension plan. Asking advice from the CPA and local attorney (who had no previous experience in such cases) made matters worse, with a “big name” law firm being recommended and over $30k in additional legal fees being billed in three months.
To make a long story short, the audit stretched on for over 2 ½ years to examine a 2 year old pension with 4 participates and $178,000 in contributions.
During the audit, no funds went to the insurance company, which was awaiting IRS approval on restructuring the plan as a traditional defined benefit plan, which the administrator had suggested and which IRS had indicated would be acceptable. The $90,000 2005 contribution was put into the company’s retirement bank account along with the 2004 contribution.
In March of 2008, the business owner received an apology from the IRS agent that headed the examination.
The IRS denied any appeal and ruled in October 2008 that the $400,000 penalty for 2003 and 2004 for not filing lender 6707A and notifying IRS of participating in a listed transaction would stand.
Could you or one of your clients be next?
Even this sympathetic IRS agent thinks there is a problem with the IRS enforcement of these Draconian penalties. Below is one of her emails to the business owner who was fined $400,000.
From: Kowalski Jean M
Date: Tue, Mar 4, 2008 at 7:12 AM
Subject: RE: Urgent
To: Bruce Hink
Thanks Bruce - yes - please just overnight them to the Grand Rapids address. Once again, I'm sorry about this. Basically, our Counsel told us that we needed language specific to the IRC 6707A penalty in order for that statute to be extended. I will ask the Reviewer to hold off an extra day.
I'm also very sorry that this is getting you down. Deeply sorry. It’s very difficult for me as well - before I started working this project (412(i)) I was doing audits of 401(k) and profit sharing plans. If there was an error in the plan, the employer would just fix it and the audit was over. There wasn't anything controversial or adversarial about it - and I felt like I was helping people - employers and plan participants. I really liked my job. In two years time, that has completely changed. I know it’s not very "professional" to make such confessions - so forgive me. But I guess I just wanted you to know that I really sympathize with your situation - and have been doing whatever I can to help. I know that having this hanging over your head can't be fun - but as this project goes forward - I think that the IRS is going to have to soften their position somewhat - so these delays may be to your benefit.
Also, I'm not really supposed to be sending emails to you - but when I went through the file I couldn't find a good phone number for you. Could you just send me a note or an email with a current phone number?
Looking to receive the signed 872s on Thursday. If you have any questions at any time - please call me. I'm usually in the office in the mornings.
As an expert witness Lance Wallach's side has never lost a case. People need to be careful of 419 Welfare Benefit Plans, 412i plans, Section 79 plans and Captive Insurance Plans. Most of these plans are sold by insurance agents. If you are in an abusive, listed or similar transaction plan you need to file under IRS 6707a. The participant files form 8886, and the salesmen or accountant who signs the tax returns files form 8918 if they got paid over $10,000. They are called Material Advisors and face a minimum $100,000 fine. Some plans are offshore which could involve FBAR or OVDI filings. If you have money overseas you probably need to file for IRS tax amnesty. If you want to reduce the tax we suggest that you first file and then opt out. For more information Google Lance Wallach.
The information provided herein is not intended as legal, accounting, financial or any other type of advice for any specific individual or other entity. You should contact an appropriate professional for any such advice.
Mercer Capital-Valuation Matters
A new article by Mercer Capital in Valuation Matters provides a comprehensive FAQ on fairness opinions in ESOP transactions. Among the most important is a list of over 20 ESOP transactions that might trigger the need for a fairness opinion—a good reminder for ESOP specialists and their clients. “Despite the breadth of the listed circumstances, there are many other situations which likely accompany ESOP transactions and transactions of ESOP owned companies,” the article advises. Any ESOP-related financial transaction “should be thoroughly reviewed from the financial perspective of the ESOP. The transaction process, evolution, negotiations, and other factors that comprise the event (and any circumstances) should be systematically analyzed and documented within the fairness opinion.”
We suggest that for help you use the men that write the books on business valuations.
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