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At Acuitas, our experiences stretch beyond the boundaries of our home state of Georgia. Our experts are not limited by geography. In addition to our nationwide experience, the listing below provides a sample of our many experiences in litigation and business valuation services.

Accounting Issues
We served as expert witness in a class action securities suit to evaluate and rebut the expert opinions that stated audited financial statements of a public company were not presented in accordance with GAAP. As consultants in another matter, we worked with defense counsel to evaluate the facts and circumstances that led to the restatement of a public company's financials and gave advice regarding the divisional CFO's testimony before the SEC about the restatement.

Accountants' Professional Liability/Accounting Malpractice
Plaintiffs and defendants often retain us, either as consultants or as an expert witness, in disputes about whether the actions of CPAs meet applicable professional standards. Our professionals have testified in jury trials and arbitration hearings regarding liability and damage issues related to allegations concerning audit and non-audit services of CPAs.

Antitrust
We have testified as an expert witness in multiple antitrust disputes including pricing issues in gasoline marketing; rebuttal of opposing experts' opinions in a suit charging price fixing of school milk contracts; collusion and kickbacks in the automobile industry; and price discrimination by a truck manufacturer. We frequently work as a team with other experts, such as economists and marketing experts.

Arbitration
We serve as consultants to attorneys evaluating damage claims and developing the presentation of their client's positions in arbitration, and also rebut the positions of opposing parties. We assist in writing briefs and position papers and often testify in hearings. Charles Phillips has frequently been selected as sole Arbitrator to determine adjustments to the purchase price and other accounting issues in business mergers and acquisitions.

Automobile Dealerships
We have significant experience in the automotive industry and have been retained by dealers, manufacturers and finance companies as expert witness for damages in disputes about dealer turndown, dealer location, lender liability, fraud and collusion, and criminal charges. In one suit, a dealership claimed it was damaged because the finance company did not provide sufficient funds to the dealership to purchase and maintain inventory levels which would allow for profitable operations. Our professional testified that the inventory always met the industry ideal for profitability and the record revealed that the manufacturer representatives and dealership consultants believed the dealer's incompetence was the cause of losses.

Bankruptcy and Reorganizations
On several occasions, the Bankruptcy Court selected Charles Phillips as an Examiner to investigate charges that concern the Court. He has served as the Fiscal Agent of a public company in Chapter 11 reorganization. He held and distributed all the Debtor's funds and, over a period of years, accounted for and assisted with spin-offs of separate companies and liquidation of other businesses. Acuitas has also served as forensic accountants to determine insolvency and preference payments in bankruptcy and the financial condition and operating ability of troubled companies.

Billing and Payment Disputes
We assisted a large insurance company in determining reasonable and customary charges for supplemental medical coverage by performing studies of similar claims and evaluating large databases. In another matter, a cruise line that abruptly stopped business was bonded for reservation deposits. Our team determined the nature and amount of refunds made by the credit card processor so reimbursement could be made to the processor.

Breach of Contract
Breach of contract is perhaps the most frequent claim giving rise to damages that we encounter. In one case we determined damages, and testified as to breach of an agreement between a major cable TV sports network and another major TV network. The latter started a cable network in the restricted market and the former alleged a breach of the agreement. There were multiple levels of revenue that were studied by us to determine future profits.

Breach of Fiduciary Duty
As CPAs, we are experienced with standard of business practices and duties conducted by management and Boards of Directors. We have provided opinions about the failure of management and directors to follow their duties regarding accounting and financial management.

Business Interruption

We prepared a business interruption claim for a business that suffered losses from a broken sewer main. After the insured filed suit for failure to pay, we determined damages for litigation. In another matter, Charles Phillips testified in U.S. District Court about the business interruption loss of a telephone service provider that was disrupted by water damage.

Class Actions
In addition to being engaged as expert witnesses for damages in class action suits, particularly securities matters, we have also classified and quantified characteristics of the proposed class and developed opinions to present at hearings. In a class action suit brought by lessors in a large oil and gas field against three large lessees, we prepared testimony about the diversity of more than one thousand lessors for such aspects as types of entities and their tax status, and forms and terms of contracts.

Construction Disputes
In one construction dispute, we proved that the plaintiff had no documentation for the unusually high overhead costs or many of the direct costs included in his claim. In another dispute, a subcontractor claimed that the prime's refusal to timely pay him caused the failure of his business. One of our professionals testified as to the alternative reasons that caused the plaintiff to abandon his business and the defendant's efforts to pay in spite of the plaintiff's unwillingness to complete punch lists on multiple jobs. We also rebutted the unfounded valuation and damages opinions of the plaintiff's expert.

Destruction of Business
We use our business valuation expertise as the foundation for damages in claims for destruction of business. An Acuitas professional testified about damages opinions in two separate suits brought by businesses that became bankrupt due to the alleged actions of other parties. We have acted on behalf of both plaintiffs and defendants in these matters.

Eminent Domain
We have often determined the business value of an entity which has lost its business due to the taking of real property by local and state authorities. We have testified about our opinions in hearings and settlement conferences.

Employment Issues
Defendants and plaintiffs have retained us to determine damages in discrimination and wrongful termination disputes. We assisted attorneys for a defendant in settling a suit brought by an employee who claimed discrimination in her efforts to become a railroad conductor. Our professionals assessed the employee's qualifications and experiences in alternate careers and researched the outlook for those careers in the plaintiff's home market to demonstrate mitigation.

Estates and Trusts
Our accounting, tax, investments and fiduciary experiences are quite useful for estate and trust types of disputes. Fiduciaries have retained us to demonstrate that accountings faithfully represented activities intended by wills and trusts; that fiduciary and professional fees were reasonable; and that investments were suitable and reasonable for the estate or trust. We have also conducted many forensic investigations of estates and trusts for plaintiffs and defendants.

Forensic Accountants
As forensic accountants, we proactively investigate the potential for a financial act, such as fraud, to have occurred. Additionally, we investigate after the fact when a complaint or claim has been filed. For example, we assisted counsel for a public company investigating whether the outside auditors properly resolved accounting shortcomings of a foreign subsidiary.

Franchise and Distributor Disputes
We frequently determine damages for such issues as breach of contract and tortious interference in franchise and distributor disputes. In addition to automobile dealerships, we have particular experience in the restaurant and hospitality industry. Charles Phillips testified about damages arising from what the Arbitrator had ruled was breach of a joint venture agreement to potentially develop a large number of franchised restaurants, although the development never began. He presented the Arbitrator with several scenarios of how the venture may have operated along with appropriate damages for each scenario.

Fraud
We recently assisted attorneys for a local wholesaler and the FBI to determine misappropriations by the company's controller of over $10 million by electronic theft and other fraudulent transactions. We examined bank records and records of a third party related to the controller to determine the specific misappropriations that occurred over several years.

Intellectual Property

  • Copyright infringement: The plaintiff alleged that our client used copyrighted sales training materials without permission and expanded its sales through the use of these materials. We determined that reasonable royalties was the appropriate measure of damages in this case and researched the market for similar materials as a basis for an appropriate royalty determination.
  • Patent infringement: Plaintiffs and defendants have retained us to determine actual damages and reasonable royalties for alleged infringement. We also frequently consider damages arising from price erosion.
  • Trademark infringement: We were engaged by the NBA and NFL to evaluate voluminous electronic files of invoices supplied by the defendant containing information on sales of sporting cards that allegedly infringed the plaintiffs' trademarks. We searched for transactions that matched certain criteria to determine the amount of infringing sales and Charles Phillips testified at trial about his opinions. We have determined damages based on reasonable royalties on numerous engagements.
  • Trade secrets: Testimony was given in state court in Nashville about damages based on lost profits and loss of business value arising from theft of trade secrets by a competitor in the music industry. We were provided with the plaintiff's database of sales, and used certain search and selection criteria to match the plaintiff's sales with that of the defendant's to determine damages.
  • Restrictive Covenants: We have determined damages in several disputes alleging breach of restrictive covenants not to compete.

Investments
We often evaluate issues of investment suitability and claims of investment mismanagement. In one situation, beneficiaries claimed that several parcels of land should have been held longer (up to 25 years) and not sold for purchase of income producing commercial property. To evaluate management's decisions, we determined the proforma cost and return from holding the parcels longer, compared to the actual returns over many years.

M&A Disputes
We frequently evaluate accounting and purchase price issues in M&A disputes. Our experience as advisors in transactions and as businesspersons who worked on many deals provides great benefit to clients in M & A disputes. One of our clients purchased 67 franchised casual restaurants from another large operator and claimed it was misled about certain accounting information during due diligence. We determined that the buyer's due diligence was reasonable and that reliance on certain data led to a large overpayment for the stores.

Product Liability
We assisted a defendant's attorneys in evaluating the plaintiff's claims that medical products at issue caused great loss of business and personal income. Plaintiff and her husband operated a large number of interlocking businesses that were not profitable, yet she claimed that her illness negatively impacted the operations of many businesses.

Securities
Clients engage us to determine damages and to evaluate accounting issues in 10(b)(5) and other securities suits. Financial management and audit committee members of a company charged with fraud and mismanagement retained us to evaluate opinions of plaintiffs' experts that financial statements were not presented in accordance with GAAP. In another recent suit, testimony was given in U.S. District Court about damages to shareholders who lost their limited period to sell shares due to the company filing disclosures about additional acquisitions.

Taxes
We were retained by a decedent's mother and sister in their suit against his widow for her failure to follow a concealed prenuptial agreement. The widow filed an alleged inaccurate Estate tax return and administered decedent's estate as desired for several years. We developed a proforma Estate, including appropriate taxes and investment strategy, according to the agreement and state law, to determine damages of the plaintiffs.

White Collar Crime
We were retained by three related corporations and their four common shareholders who were indicted by the U.S. Government for short-weighing and defrauding customers over a period of eight years. After evaluating ten years of business records and evidence accumulated by the U.S., Charles Phillips testified that there was no evidence for claims against the shareholders, who were acquitted. In another matter, we developed the financial and operating history and characteristics of the country's largest auto dealership organization to rebut the U.S. Government's claim that the organization was built by fraudulent activity.

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Valuation Experience

Valuations for Financial Reporting (Fair Value Measurements)

Acuitas has assisted many publicly traded and privately held companies with the valuation of various intangible assets and equity interests for the purpose of financial reporting. Acuitas works closely with company management and their auditors to provide supportable, comprehensive valuation analysis.

Many of these engagements involve companies that are registered with the SEC. We have worked closely with company management teams, their auditors, and legal counsel to assist them with valuation issues that may be raised by the SEC.

In one example, one of the largest providers of electronic funds transfer systems retained Acuitas to provide valuation analysis regarding the allocation of purchase price under SFAS 141 for a recent acquisition. Acuitas worked with the company's management and eventually the company’s outside auditors to identify and estimate the fair value of the acquired intangible assets.

In another example, Acuitas was also retained by a national quick service food company to assist them with an analysis of their reporting units under SFAS 142 to test for potential impairment of the company's goodwill.

In still another example, Acuitas was retained to prepare a valuation analysis and report to assist a waste disposal company in their determination of the fair value of certain identifiable tangible and intangible assets acquired from their purchase of a competitor's division under SFAS 141. More specifically, we were asked to assist the company in allocating the goodwill among the operating divisions, and in calculating the value of the operating rights for a commercial disposal division.

Pre-IPO Stock Transactions ("Cheap Stock")
A large internet portal retained Acuitas to provide valuation analyses of both its venture capital rounds of preferred stock and shares of common stock issued to founding management for financial reporting purposes in anticipation of the company's initial public offering.

Employee Stock Option Grants Under SFAS 123r
We have assisted a national quick service food company with an estimate of the fair value of certain stock options granted to a key employee to assist our client with financial reporting under SFAS 123r. Our analysis considered the various methods suggested under the AICPA’s practice aid, “Valuation of Privately-Held-Company Equity Securities Issued as Compensation”.

Stockholder or Shareholder Disputes
Acuitas has prepared numerous valuations related to shareholder suits and has, in certain cases, been court appointed. Our professionals have testified for their clients on numerous occasions for a variety of purposes, particularly the value of certain ownership interests under specific instances.

In one matter, Acuitas assisted a financial service company with a valuation analysis for a buyout of a minority shareholder. We testified as to the value of the member’s interest in an arbitration hearing.

Intellectual Property Infringement

  • Copyright infringement: The plaintiff alleged that our client used copyrighted sales training materials without permission and expanded its sales through the use of these materials. We determined that reasonable royalties was the appropriate measure of damages in this case and researched the market for similar materials as a basis for an appropriate royalty determination.
  • Patent infringement: Plaintiffs and defendants have retained us to determine actual damages and reasonable royalties for alleged infringement. We also frequently consider damages arising from price erosion.
  • Trademark infringement: We were engaged by the NBA and NFL to evaluate voluminous electronic files of invoices supplied by the defendant containing information on sales of sporting cards that allegedly infringed the plaintiffs' trademarks. We searched for transactions that matched certain criteria to determine the amount of infringing sales and Charles Phillips testified at trial about his opinions.
  • Trade secrets: Testimony was given in state court in Nashville about damages based on lost profits and loss of business value arising from theft of trade secrets by a competitor in the music industry. We were provided with the plaintiff's database of sales, and used certain search and selection criteria to match the plaintiff's sales with that of the defendant's to determine damages.
  • Restrictive Covenants: We have determined damages in several disputes alleging breach of restrictive covenants not to compete.
Eminent Domain Matters
We are often retained to determine the value of an entity which has lost business due to the taking of real property by either state or local officials. We have testified about opinions in hearings and settlement conferences. In one matter, we were retained as a rebuttal expert as to the reasonableness of opinions provided by various other experts as to the viability of plans to develop a sports complex in which a portion of the site was taken for an freeway exit ramp by the Department of Transportation.

Economic Damages
Often valuation is a component of economic damages asserted in corporate actions. In a recent matter, one of the professionals at Acuitas assisted two well known medical societies with a rebuttal analysis of asserted economic damages related to actions of these societies which purportedly damaged a medical device company.

Corporate Reorganizations
Acuitas has been retained by several of the largest commercial banks in the United States to assist them with the valuation of the preferred and common stock of captive REITs owned by the banks. The valuations which resulted in conclusions of several billions of dollars in many of these reorganizations assisted the banks and their tax advisors with tax planning.

Estate & Gift Tax Planning and Reporting
Acuitas has assisted many types of entities and individuals with Estate and Gift tax planning and reporting. In one instance we were retained by the estate of the majority shareholder of a regional auto dealer to provide an estimate of the fair market value of over 25 entities.

In another matter, we assisted the estate of an individual which held a large block of publicly traded stock and several fractional interests in real estate which harvested timber.

Income Tax S-Corp Conversions
A marine equipment manufacturer retained Acuitas to provide valuation analysis and assist them in establishing a tax basis for the company's conversion to an S Corporation. In another situation a technology company that licenses certain technology related to the manufacture of gas masks retained Acuitas to assist with the election of S corporation status.

409A Issues
We are retained in matters involving the fair market value of equity interests granted to employees as compensation. Often these matters involve complex analysis as to the estimate of the fair market value of various rounds of preferred stock in order to estimate the fair market value of the common stock.

Solvency Opinions
One of our professionals provided an analysis for a solvency opinion for a large Midwest based private equity firm. The opinion was for the Board of Directors of one of the private equity firm’s portfolio companies in which the private equity firm is the lead investor. The purpose of the solvency opinion was to assist the Board of the portfolio company with a leverage recapitalization.

Merger and Acquisition Analysis

One of the largest importers of flowers in the United States retained Acuitas to provide financial advisory services to assist the company as to its value under several strategic alternatives. In another matter, Acuitas assisted a provider of convention planning services with valuation analysis related to a letter of intent to acquire the company. Acuitas provided financial analysis to assist the company and its legal advisor with negotiations in the transaction.

Intellectual Property Analysis
Acuitas has prepared hundreds of intellectual property and intangible asset valuations including computer software, research and development, proprietary technology, patents, trade names, trademarks, licensing contracts, customer lists, assembled workforce, distribution networks, going concern and goodwill. The valuations serve varied purposes including support of mergers and acquisitions, licensing, financial reporting, tax, SEC review and litigation.



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