• QuickRead Top Story - Valuation/Appraisal

    Essential Factors in Deciding: Whether to Establish an ESOP

    June 25, 2025

    Not all companies are fit for an ESOP. The decision to create an ESOP is a significant one, and it requires careful evaluation beyond enthusiasm or the appeal of tax deferral. Two critical considerations stand out when evaluating whether to move forward: (1) independence of the valuation expert, and (2) whether the company is operationally, financially, and structurally suited for ESOP ownership. The author discusses the consequences of sponsoring an ESOP. For many closely held business owners, the question of succession planning often leads to consideration of an Employee Stock Ownership Plan (ESOP). ESOPs offer a unique structure that allows…

  • QuickRead Top Story - Valuation/Appraisal

    “Adequate Consideration” Defined?

    April 24, 2024

    A Legislative Approach? In April of 2023, the United States Department of Labor (DOL) committed to move forward with a regulation to clearly detail “adequate consideration” in section 408(e) of the Employee Retirement Income Security Act of 1974 (ERISA). For decades the DOL has utilized litigation versus heeding Congress’s edict to enact regulations regarding adequate consideration and it seems as though action is going to finally be taken. This article discusses recent developments suggesting a change in their approach. In April of 2023, the United States Department of Labor (DOL) committed to move forward with a regulation to clearly detail…

  • Mergers and Acquisitions/Exit Planning - QuickRead Top Story

    What is the Small Business Reorganization Act?

    August 12, 2020

    Highlights of the New Bankruptcy Chapter: Chapter 5 Many small businesses could not afford the processes in place under Chapter 11. The SRBA, signed into law in August 2019, created Chapter 5 and was intended to provide a “fresh start” to small business owners. This article highlights some of the key issues under the new law. On August 23, 2019, a relatively small, 22-page bill known as the Small Business Reorganization Act of 2018 (SBRA), was signed into law by the President of the United States. The law would become effective six months later on February 19, 2020, only weeks…

  • Litigation Consulting - QuickRead Top Story

    Overview of the But For Investment Portfolio

    October 16, 2018

    To Measure Trustee Breach of Fiduciary Duty Damages The but for investment portfolio is a tool that damages analysts utilize to estimate economic damages when there is an allegation of a breach of fiduciary duty with regard to the management of an investment. In its simplest form, the but for investment portfolio estimates the value of a portfolio but for the alleged breach of fiduciary duty. Case law precedents established the but for investment portfolio analysis as a method to estimate economic damages on a market adjusted basis. While the concept of a but for investment portfolio analysis is simple,…

  • QuickRead Top Story - Valuation/Appraisal

    The Perils of the “Power of Substitution”

    May 30, 2018

    For “Intentionally Defective” Grantor Trusts (Part I of II) The power of substitution is held by the settlor of a grantor trust if this power is provided by the trust instrument. This power allows the settlor, at any time, to remove an asset or assets from the grantor trust in exchange for an asset or assets of equivalent value. Such a transfer can be problematic and vulnerable to challenge if the equivalent value is questionable. One such example is when a promissory note bearing a below-market interest rate is the substituted property. First, this discussion presents an analysis of the…

  • Litigation Consulting - QuickRead Top Story

    Application of the Sales Projection Method

    May 16, 2018

    In Measuring Trustee Breach of Fiduciary Duty Damages (Part I of II) The prudent investment of trust assets can minimize the potential for trustee fiduciary litigation risk, in addition to maximizing the trust beneficiaries’ economic interest in the trust. However, trust beneficiaries may initiate a breach of fiduciary duty tort claim when they feel that the trustee has breached any investment management fiduciary duties to the trust. For trust beneficiaries, and their legal counsel, who have brought breach of fiduciary duty tort claims against a trustee, one of the issues is how to measure the “damage” to the beneficiaries because…

  • QuickPress

    Where are all the Grantor Trust Reimbursement Statutes?

    March 21, 2018

    Some planners are adding language to grantor trusts that allows trustees to pay taxes directly or to reimburse grantors.  This can dissuade grantors from turning off grantor trust status entirely, but there are certain IRS rules to consider. To read the full article in WealthManagement, click: Where are all the Grantor Trust Reimbursement Statutes?

  • QuickRead Featured - QuickRead Top Story - Valuation/Appraisal

    Yes, Yet Another Article on the “Settlement” But With a Twist

    October 12, 2016

    Analysis of Unaudited Financial Statements—Who and How? There has been much discussion within the ESOP community about the “settlement” and its reverberations. As readers are likely aware, the settlement in question refers to the 2014 settlement agreement between GreatBanc Trust Company and the United States Department of Labor (DOL). The terms of the settlement include, among other things, an agreement concerning fiduciary engagements and process requirements for employer stock transactions. The settlement provides pause for thought for all trustees and their advisors, as the agreement can be viewed as a “playbook” that, if followed, could serve as evidence that the…

  • QuickPress

    What If My Client Can’t Find a Loved One’s Will?

    March 9, 2016

    Clues to Finding a Missing Will Wills sometimes go missing.  Places to check include probate court, safe deposit boxes and hiding places around the home.  Also, consider contacting relatives and reviewing bank statements.  The Kansas & Missouri Estate Planning Blog reminds you that good communication can help prevent this type of problem altogether. To read the full article in WealthManagement.com, click: What If My Client Can’t Find a Loved One’s Will?

  • Intellectual Property - QuickRead Featured - QuickRead Top Story

    Intellectual Property Valuation for Bankruptcy Purposes

    March 18, 2015

    Part I: Three of the 12 Reasons a Valuation Is Needed in Chapter 7, 9, and 11 This two-part article summarizes the various types of intellectual property that valuation analysts (“analysts”) may encounter within a commercial bankruptcy controversy, lists the generally accepted intellectual property valuation approaches, and presents the reasons why analysts may be asked to value intellectual property within a commercial bankruptcy environment. In Part I, Mr. Reilly identifies three of the 12 reasons why a valuation is needed in a bankruptcy proceeding.

  • QuickRead Featured - QuickRead Top Story - Valuation/Appraisal

    Recommended Change Not Needed for Chapter 11 Cramdown Rates

    March 11, 2015

    The Myth of Efficient Market Cramdown Rate In December 2014, the American Bankruptcy Institute issued its Final Report and Recommendations of the Commission to Study the Reform of Chapter 11. The Commission was comprised of 22 professionals. The group included attorneys, academics, financial advisers, and a former bankruptcy judge. After over two years of work, the Commission made more than 200 recommendations to enhance the Chapter 11 process and provide a more efficient, less costly path for smaller businesses seeking bankruptcy. In this article, Dr. Needham discusses the origin of the Commission’s purpose, the recommendations and the impact of the…

  • QuickRead Featured - QuickRead Top Story - Valuation/Appraisal

    Difficulty with Applying the Contract Rate Approach to Chapter 11 Bankruptcy

    January 21, 2015

    A Case Study, Part 2 of 2 In this second part of the article, Dr. Allyn Needham examines post-Till cases from the northern and western districts of Texas, highlights the problems encountered using the Formula Approach, and tests whether the Contract Approach may have provided a better approach and reduced the incidence of litigation where a cramdown is proposed. Ultimately, Dr. Needham proposes that despite the problems presented by the Formula Approach, the Contract Approach is not a panacea for Chapter 11 bankruptcy matters. Business valuators practicing in this area must understand case precedent and recognize the limits of the…

  • QuickRead Featured - QuickRead Top Story - Valuation/Appraisal

    Difficulty with Applying the Contract Rate Approach to Chapter 11 Bankruptcy

    January 14, 2015

    A Case Study, Part 1 of 2 In the Till decision, the U.S. Supreme Court selected the Formula Approach to provide a straightforward, familiar, and objective method for determining the cramdown interest rate to be paid on secured claims in Chapter 13 cases, minimizing the need for potentially costly additional evidentiary proceedings. Many bankruptcy courts have found this decision instructive and directive for Chapter 11 matters. However, the application of the Formula Approach for determining the cramdown interest rate on secured claims in Chapter 11 matters has not made for a straightforward approach, nor has it eliminated sometimes lengthy and…

  • QuickRead Featured - QuickRead Top Story - Valuation/Appraisal

    Three Common Roles for Financial Experts

    November 12, 2014

    In Chapter 11 Bankruptcies, Part 2 Financial experts may be called on to provide a number of services in Chapter 11 bankruptcy cases. Common among these services is the analysis of the interest rate to be paid on secured claims, the valuing of the bankrupt business or a portion of the bankrupt estate, and the creation or analysis of cash flow projections to assist in determining the feasibility of the reorganization plan. None of these functions are exclusive to the bankruptcy courts. However, in applying commonly used techniques, an expert must be aware of the methodologies that have been accepted…

  • QuickRead Featured - QuickRead Top Story - Valuation/Appraisal

    Three Common Roles for Financial Experts

    November 4, 2014

    In Chapter 11 Bankruptcies, Part 1 of 2 Financial experts may be called on to provide a number of services in Chapter 11 bankruptcy cases. Common among these services is the analysis of the interest rate to be paid on secured claims, the valuing of the bankrupt business or a portion of the bankrupt estate, and the creation or analysis of cash flow projections to assist in determining the feasibility of the reorganization plan. None of these functions are exclusive to the bankruptcy courts. However, in applying commonly used techniques, an expert must be aware of the methodologies that have…