Case Studies

Assignment :

As the basis for an insurance claim, we performed a business valuation of a restaurant that was destroyed by a fire. The restaurant was located in lower Manhattan and had been adversely affected by local events.

Result :

By using normalization and weighting techniques, we were able to increase the value of the restaurant and our client’s settlement.

Assignment :
The owners of an established, successful business needed to determine the fair market value of their company. They wanted to incorporate this value into their shareholders agreement relating to the dissociation clauses which may affect either owner in the future. Their existing agreement had a value definition and formula which failed to properly represent the true value of the company.

Result :
Through our application of the appropriate methods and value calculations, we were able to provide the owners and their families with the future protection they needed by establishing the entity’s fair market value, which was almost twice the amount calculated under the original shareholder’s agreement value formula.

Assignment :
We were retained by a New York entertainment magazine publisher to value both the 100% interest and a 1% limited partnership interest for the purpose of determining the amount to be paid to a departing executive.

Result :
Working with the company’s CFO and the treasurer from its controlling foreign partner, we calculated a range of values based on different terminal value scenarios, which offered our client the needed flexibility to negotiate the executive’s payout.

Assignment :
On behalf of the seller of a large medical equipment distributor, we prepared the company’s balance sheet at the closing date for the purpose of a purchase price adjustment. The buyer’s accountants prepared their own balance sheet to be used to calculate any purchase price adjustment which was based on an agreed upon amount of working capital.

Result :
The buyer’s accountants arrived at a balance sheet which reflected a shortage of required working capital totaling $1.5 million, while Gettry Marcus’s balance sheet reflected a shortage of $200,000. We were able to prove that our working capital calculation was correct and highlighted many errors and items not properly considered by the buyer’s accountants. Based on our findings we were able to save our client $1.3 million on the purchase price adjustment.

Assignment :
On behalf of the buyer, we performed due diligence on the financial operations of a large retail store to determine its fair market value for a potential acquisition. Working with the client, we prepared projections of the company’s future earnings, including appropriate adjustments.

Result :
Based on our findings, we determined the seller’s asking price was 40% greater than the fair market value of the company, leading our client to withdraw from the transaction.

Assignment :
Gettry Marcus was retained by a major financial institution to examine the accounting books and records of a $100 million food distributor with outstanding credit obligations of $10 million.

Result :
Based on our findings, we determined the seller’s asking price was 40% greater than the fair market value of the company, leading our client to withdraw from the transaction.

Assignment :
We were engaged to value a decedent’s 50% interest in a wholesale distributorship in order to establish the value to be reported on the estate tax return.

Result :
Based on our research and interviews with the company’s personnel, we determined the decedent was the key person in the company, responsible for managing all relationships with their major customer and overseas manufacturing contractor. We applied a significant key-man discount to the fair market value of the company and reduced the taxable estate by $1.4 million. Upon subsequent challenge by the Internal Revenue Service, our key-man discount was accepted without change.

Assignment :
As part of his overall estate plan, our client wished to gift limited interests in the family limited partnership to his children and grandchildren. The partnership’s assets included residential buildings in New York City and a portfolio of marketable securities valued in total at $6.5 million.

Result :
Utilizing our experience, coupled with our focused research, we valued the gifted interests applying an appropriate minority discount which will provide future tax savings to our client’s estate.

Assignment :
We were retained by a non-owner spouse to perform a forensic accounting investigation and business valuation of the owner spouse’s business in a marital dissolution case. Historically, the business reported minimal net income resulting in nominal value.

Result :
While performing our forensic accounting review we uncovered sizeable undocumented disbursements, which resulted in a reduction of the company’s net income. By adding back these disbursements to net income, the value of the company was increased by approximately $1 million and our client’s equitable distribution by approximately $500,000.

Assignment :
We were retained, in an arbitration case, by a dissenting minority shareholder of a fitness club who was being forced out by the majority shareholders. The majority shareholders were intentionally not soliciting new members in order to reduce the value of the business until the minority shareholder’s interest was purchased. The majority shareholders’ expert valued the business at zero based strictly on the book value from historical financial statements.

Result :
We were able to obtain operating information of fitness clubs similar in size and geographic location to the subject club and prepared pro-forma income statements based on membership levels of comparable facilities. We prepared our report according to New York State’s standard of fair value which does not recognize discounts for minority interests in dissenting shareholder actions. From this, the arbitrator determined that if the company was managed properly it would have significant value, and ruled in favor of our client.

Assignment :
Gettry Marcus was retained by counsel to represent a medical doctor holding a minority interest in a multi-location medical practice, with annual revenues in excess of $100 million. In addition, there were multiple real estate holdings owned by the same shareholders in separate entities. We were engaged to evaluate an existing buyout offer, and perform an extensive forensic examination of the medical practice and real estate entities.

Result :
Our forensic investigation yielded several instances of undisclosed corporate opportunities being diverted from the medical practice where our client was a partner. In addition, we documented examples of the medical practice paying personal expenditures and unauthorized disbursements for the benefit of the other partners. We also identified several instances where funds of the medical practice were used to acquire real estate that was titled in the names of the other partners. These findings, when presented to the existing partners, resulted in the purchase price being increased by approximately eight-fold. We also worked closely with tax counsel regarding tax planning and projections associated with the transaction.

Assignment :
Gettry Marcus was retained by counsel representing the Plaintiff, a 50% owner of a $30 million privately held company, to calculate the amount due to his client related to the disproportionate benefits which had been received by the Plaintiff’s partner. We were also engaged to value the Plaintiff’s interest for the purpose of negotiating a buyout. We prepared analyses detailing the various manners in which our client’s partner had diverted corporate opportunities and funds to himself and to entities in which our client did not have an ownership interest.

Result :
Our investigation resulted in a buyout transaction with terms that far exceed the amounts previously offered to our client by his partner, and with the opportunity to realize even greater sums if reasonable growth targets were achieved.