JAN/FEB 2012 Issue of Advocate's Edge

Power of three

Court endorses triangular valuation approach

This article discusses a recent Tax Court case. After a company announced a recapitalization agreement, a shareholder filed suit, alleging that the agreement significantly undervalued the company and therefore improperly transferred wealth and voting power from its minority shareholders to its primary debt holder. The plaintiff's expert arrived at an exceptionally high value using only the discounted cash flow method. But the court rejected this approach, placing greater credence on the defense's use of multiple valuation techniques.

E-discovery pilot program

Survey suggests Seventh Circuit is on the right track

Almost three years ago, the Seventh Circuit Court of Appeals launched its multiphase Electronic Discovery Pilot Program. The program is intended to develop, evaluate and improve pretrial litigation procedures that ensure fairness and justice for all parties while reducing the rising cost and burden of electronic discovery. This article looks at the principles of the program and the findings thus far.

Do your clients know the facts about fraud?

Employee fraud remains a persistent concern for American companies, yet too many owners believe that it can't happen to them. Small businesses, in particular, foster environments of trust, and their owners might not even recognize criminal activities — until the company suffers financial losses. This article summarizes findings of the Association of Certified Fraud Examiners' (ACFE's) biennial survey of fraud experts, including the types of fraud that present the biggest challenges to specific kinds of businesses.

IRS easing restrictions on innocent spouse relief

Years after a divorce decree has been signed and entered, an innocent former spouse could end up on the hook for the misstatement of taxes on a couple's joint tax return. In such a case, the nonresponsible spouse must request innocent spouse relief from the IRS. This article explains that the IRS time limit on certain relief requests was recently expanded, and many spouses — divorced or not — who previously were denied relief because of the limit may now qualify.

 

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© 2012 McGovern & Greene LLP