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Certified Public Accountants
(805) 306-7890
www.arxisfinancial.com

Litigation Consulting

Update

Forensic Accounting - Fraud - Business Valuation


June 2016

Recent Case:

Comparative Analysis for Family Law Dispute

Issue:

Arxis was contacted to assist in a family court matter involving complex tracing matters. There was an ongoing dispute regarding whether certain material assets were separate or community. Determining the nature of the assets affected the division of assets and, because the cash flow associated with those activities were substantial, reimbursement claims would be significantly affected. Both parties came into the marriage with considerable separate assets.

Arxis work:

The case had been active for over a year before Arxis was brought into the matter. The correspondence in that year included settlement offers from both sides. Both offers were immediately rejected as preposterous and even insulting. After this "attempt" to settle, forensic accountants were retained and the forces were being marshalled for battle in court. Each side made substantial commitments to preparing tracings to prove respective claims in trial.

Arxis immediately began the work of preparing the tracings for several bank accounts covering the period of the marriage and the year since separation. Based on some of the data and the conclusions becoming evident from the records, Arxis suspended the tracing work and analyzed the two rejected settlement proposals more closely. To understand the two offers, side-by-side marital balance sheets were prepared. On the left was the Petitioner's version of assets, debts, and reimbursement claims as reflected in their Section 1152 offer letter. Similarly, on the right was Respondent's version of assets, debt, and reimbursement claims. At the bottom of each balance sheet was a calculation of the net equalization payment due based on each party's assumptions and conclusions.

Amazingly, what the parties perceived to be a massive gap between the two positions (millions of dollars) was actually, when put in a side-by-side analysis, a relatively narrow difference of a couple hundred thousand dollars. The emotional attachment to some of the issues by both parties and the enormous accounting complexity had masked the proximity of potential compromise.

Result:

Arxis approached our client and presented the prospect that staggering legal and accounting fees could be saved if there was an openness to compromise on a much smaller difference than the litigants previously perceived. Our client approached opposing counsel and requested a settlement conference with both sets of attorneys and forensic accountants. It took most of an eight hour day, but the case settled. The two litigants were initially stunned at how close their two seemingly opposite positions actually were. Significant fees were saved and it is likely that at least two years were cut from the dispute resolution process.

 
Service Profile:

Business Valuation Services for Succession Planning

Of all the assets that make up an estate, the most complex and valuable is often the closely-held business. The business represents a lifetime of effort and the source of wealth, income, and great satisfaction. The first step in succession planning is to understand what the owner has to pass along. Establishing the nature of the business and the ownership interest is critical to accurately and efficiently implementing a succession plan. Putting a value on that interest is easily the most difficult part of determining "What do I have?"

Hiring the right valuation firm is obviously a crucial decision. Arxis Financial's valuation specialists provide clients with a comprehensible valuation that aids attorneys, business owners, management, and financial planners in succession planning. We also have extensive experience in presenting and defending our findings in the context of litigation. Our clients benefit from having valuation professionals who understand the realities of market valuations, resulting in very defensible valuations. Our experts are well-known in the industry and highly respected for their depth of knowledge and resources.

The Business Valuation practice is headed by partner Chris L. Hamilton, CPA, CFE, CVA. Mr. Hamilton is a Certified Public Accountant, Certified Fraud Examiner, and Certified Valuation Analyst. He is a licensed life and disability insurance agent and a General Securities Representative. Mr. Hamilton has published articles in several publications, and has made presentations at national conferences, training institutes and seminars on topics including forensic accounting, fraud and business appraisal.

 
Speeches:

Upcoming Speaking Engagements for Chris Hamilton

Chris Hamilton's upcoming presentations include:

June:

  • "Financial Ethics, Morality, and the Law" presented at Ronald Reagan Presidential Library, Simi Valley
  • "Explaining Damages to Juries and Others" presented to NACVA National Conference, San Diego
  • "Valuation Fundamentals, Theory & Techniques" presented to NACVA, Philadelphia

July:

  • "Explaining Damages to Juries and Others" presented to CalCPA, Pasadena

August:

  • "Valuation Fundamentals, Theory & Techniques" presented to NACVA, San Antonio

If you are interested in asking Mr. Hamilton to speak at your organization's upcoming meeting, please feel free to contact him.

 

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Copyright 2016 Arxis Financial. Articles may not be reprinted without permission.


Chris Hamilton Photo

Chris Hamilton, CPA CFE, CVA
chamilton@arxisgroup.com
(805) 306-7890
www.arxisfinancial.com
@ArxisChris on Twitter Chris Hamilton on Linkedin

Arxis Financial Logo

Litigation Consulting

Forensic Accounting - Fraud - Business Valuation

 

Clients know us for results. Opposing counsel know Arxis for wishing they had hired us.