Blog - Page 3

From the September/October 2019 issue of BCC Advisers Litigation & Valuation Report

The cost of capital is an important consideration when valuing a business under the income approach. Here we explain how business valuation experts determine the “optimal” capital structure for a business and why it matters.

After humming along quite happily with a high level of confidence into early 2020, Iowa’s mergers and acquisitions market briefly went into shutdown mode this spring with the arrival of the COVID-19 pandemic. BCC shareholder Tom Cavanagh contributes his thoughts along with other Des Moines M&A professionals on the current environment and outlook for M&A. Article by Joe Gardyasz of the Business Record.

From the November/December 2017 issue of BCC Advisers Litigation & Valuation Report

Perceived independence is critical when it comes to the effectiveness of expert witness testimony. In this article we discuss a case in which the U.S. Tax Court rejected an expert’s testimony on the reasonableness of compensation paid to shareholder-employees because he failed to provide an “independent and objective analysis.”

From the July/August 2018 issue of BCC Advisers Litigation & Valuation Report

Negative events — including defamation, securities fraud, product liability, intellectual property infringement, and data breach and other cybercrime proceedings — can seriously impair a company’s reputation. This article explains the types of damages and the tools financial experts use to quantify losses.

From the BCC "Baton" - 2019 Q3

Transaction multiples may make the theory of business valuation seem relatively straightforward. However, valuing a company can quickly veer into a challenging world of discount rates, weighted average cost of capital, and other obscure concepts, making it easy to lose sight of the big picture. We give you five valuation tips to help you maintain perspective.

From the May/June 2017 issue of BCC Advisers Litigation & Valuation Report

The IRS and C corporations often disagree about the reasonableness of owners’ compensation. C corporations want payments to shareholder-employees to be classified as deductible compensation expense — but the IRS would prefer these payments to be classified as nondeductible dividends. This article explains the factors that persuaded the U.S. Tax Court to uphold $11 million in deductions for salaries, bonuses and directors’ fees paid to two shareholders in 2003 and 2004.

From the May/June 2018 issue of BCC Advisers Litigation & Valuation Report

When calculating reasonable royalty damages in patent infringement cases, experts are often called upon to “apportion” the royalty base among multiple patents or between infringing and noninfringing products or product features. This article summarizes a federal district court case that excluded a damages expert’s testimony on Daubert grounds because her apportionment methodology improperly inflated the royalty base.

There are a variety of reasons business owners use ESOPs as an exit strategy, usually with the expectation that the ESOP will last in perpetuity. However, that’s not always the case. Here we share the more common situations we see leading to the sale of an ESOP company to a third party.

From the May/June 2018 issue of BCC Advisers Litigation & Valuation Report

Rather than give up on defendants that appear to have limited financial resources, plaintiffs may assert that the companies are nothing more than “alter egos” for more solvent companies. This article identifies various red flags, such as combined corporate structures, shared advisors and numerous “related party” transactions, which may persuade a court to “pierce the veil” of a corporation or LLC.

From the March/April 2019 issue of BCC Advisers Litigation & Valuation Report

When using the discounted cash flow method to value a business, a large chunk of the value is contained in the “terminal” value. This article discusses ways business valuation experts estimate terminal value and the importance of using reasonable assumptions about long-term growth.