The Shareholder Agreement – Preparing for the Unexpected

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shareholder_agreement small_business“The best laid schemes o’ mice and men go oft awry,” wrote Robert Burns, and this certainly applies to even the best-run family businesses. A shareholder agreement helps prepare for the unexpected and lays out the ground rules of a small business in terms of governance, succession, the transfer of assets, liquidity and other issues. Think of it as a prenuptial agreement for a family business — a mechanism to reduce hard feelings and provide for an equitable distribution of assets.

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Contracts with Contingent Consideration Provisions – Stallone Fights Studio’s Accounting Methods

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Contracts that include contingent consideration provisions can lead to disputes regarding key definitions, as well as the amount and timing of payouts. Here are the details of a high-profile accounting dispute that started more than two decades ago between Sylvester Stallone’s production company and a major movie studio involving the 1993 movie Demolition Man.  Gryphon Valuation Consultants has specific experience in analyzing the value ramifications of contingent consideration provisions and conditions precedent.

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Why Is the Business Valuation Date so Important?

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Valuation_Date_ImportantWhen one considers how the value of an asset will be determined, it’s common to think about which method the appraiser will use or whether discounts may apply. A critical factor that might not immediately come to mind is the valuation or appraisal date. This article explains why the “as-of” date matters and how the purpose of the valuation guides this decision.

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Business Valuations Are Not Commodities

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Business Appraiser Magnifying GlassWhen hiring a business appraiser, you typically get what you pay for. Some business owners may be tempted to seek the offering with the lowest price tag. After all, a business valuation is just a formality, isn’t it? Many owners perceive formal appraisals as something required by an outside party — such as the IRS, a judge or a lender — in order to obtain approval or comply with a regulatory requirement. But a valuation actually provides insight into a company’s current market value, as well as key value drivers to enhance value going forward. A valuation can also serve as a wake-up call for business owners with unrealistic expectations. Continue Reading →

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Business Valuation Myths and Truths

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The busineCrystal Ball business valuation myths and truthsss valuation profession has grown rapidly since 1980. Over the decades, it has developed from a rudimentary process into a highly sophisticated mix of art and science to determine the value of a business or business interest. However, many business owners and investors fail to understand the valuation process and its results. Here are some common business valuation myths and the underlying truths.

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Price vs. Value: Which Is Correct When Selling a Business?

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When a businPrice vs. Value: Which is Correct?ess is sold, it often sells for more (or less) than the appraised value. This may come as a surprise to most people, but valuators understand that there are many valid reasons that “price” and “value” may differ. Businesses that understand this subtlety are better positioned to make informed decisions when buying or selling a business.

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Reliable Experts Are Independent Experts

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Valuation Expert WitnessA valuation expert witness builds on a solid foundation constructed by a reputable source — or multiple sources — to reach a reliable conclusion. These are the assumptions and sources underlying the expert’s opinion. But when an expert isn’t given the opportunity to question assumptions provided by management or the attorney or to perform independent analyses and research, he or she might not survive a Daubert challenge in federal court.

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E-Discovery: Social Media Counts In Litigation

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E-Discovery in Social MediaCourts have made it clear that social media may be subject to pre-trial discovery. But judges aren’t inclined to grant blanket access to social medial accounts just so litigants can engage in a fishing expedition. Instead they require proof that a site is likely to contain relevant material. This article discusses the e-discovery rules and how social media presents unique challenges.

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Exit Planning: Easing Our Clients’ Pain

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MoneyTree Exit PlanningStudies show that most business owners do not understand the tremendous benefits of proactive exit planning.  Financial and legal professionals are in a position to guide their clients through this life-changing process.  This is the final part of a three-part series focusing on the key elements of a successful exit plan.  The following was sourced from an article by Richard Jackim author of The $10 Trillion Opportunity: Designing Successful Exit Strategies for Middle Market Business Owners.

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