The Neutral Accountant’s Role in the Arbitration Process
Resolving Working Capital & Earnout Disputes Without Costly Litigation
With the global value of M&A transactions soaring to unprecedented heights, companies are looking at ways to avoid costly and time-consuming post-transaction disputes. Certain types of disputes, such as those involving differences in the interpretation of accounting or financial reporting and valuation, may require the parties to engage a neutral accountant as part of an arbitration process instead of entering litigation.
In the arbitration process, a neutral accountant delivers a binding decision, but follows a more streamlined procedure very different from a trier of fact in a courtroom. Using a neutral accountant can be a more efficient and less costly way to resolve the issues in the dispute, compared to enduring a lengthy and expensive litigation process.
In an article originally published in Securities Docket, Jeff Litvak explains how to work effectively with a neutral accountant and examines the position’s role in two areas where disputes commonly arise post transaction, working capital and earnouts.