Chapter 2: Valuation and Acquisition Disputes | FTI Consulting

Chapter 2: Valuation, Solvency and Acquisition Disputes

Top Disputes & Investigations

Forensic & Litigation Consulting

September 14, 2020

Chess piece and coins

We expect the recent economic downturn to have wide-ranging impacts on M&A and valuation disputes. Share prices have fallen dramatically, particularly in certain industries, and parties will seek to nullify purchase agreements. We also expect that many companies will examine options to remain solvent in the face of the pandemic.

We have professionals with a proven track record of helping our clients navigate complex valuation issues. We combine a deep expertise in valuation with the ability to evaluate specific company, industry, and economic factors. In this section of our 2020 Insights: Top Disputes & Investigations, we highlight some matters we have recently worked on in this space.

Accounting Arbitrator in a Working Capital Dispute

FTI Consulting served as the Accounting Arbitrator in a working capital dispute in which more than $40 million was in dispute. The dispute involved the appropriate accounting treatment under U.S. GAAP of certain items such as the valuation of inventory, the calculation of inventory reserves, appropriateness of accruals, and cutoff issues for accounts payable and accounts receivable.

We assisted the parties in determining the timeline and framework for the arbitration considering discovery, interrogatories, and other submissions of critical information made by the parties. After analyzing the company’s historical financial and transactional data and researching authoritative guidance, in addition to other industry-specific research, we issued a detailed written determination that successfully resolved all disputed items.

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