M&A Disputes
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Оглавление
Biemans A. Vincent. M&A Disputes
Preface
Acknowledgments
About the Authors
PART One. The M&A Dispute Framework
CHAPTER 1. Introduction to M&A Disputes
THE TRANSACTION LIFECYCLE
CATEGORIES OF PURCHASE PRICE ADJUSTMENT PROVISIONS
ACCOUNTING ARBITRATIONS VERSUS EXPERT DETERMINATIONS
OVERVIEW OF THE BOOK
CHAPTER 2. The Post‐Closing Adjustment and Dispute Process
FROM CLOSING TO DISPUTE
THE DISPUTE RESOLUTION PROCESS
CHAPTER 3. Post‐Closing Net Working Capital Adjustments
NET WORKING CAPITAL ESTIMATION AND ADJUSTMENT
AN APPROACH TO DEFINING AND QUANTIFYING NET WORKING CAPITAL
THE DEMARCATION AND QUANTIFICATION OF NET WORKING CAPITAL
PART Two. Core Concepts and Issues
CHAPTER 4. The Nature of GAAP
BACKGROUND OF GAAP
GAAP IS NOT NECESSARILY NARROWLY PRESCRIPTIVE
GAAP IS NOT A FREE‐FOR‐ALL
GAAP BY ITSELF IS TOO BROAD FOR CLOSING DATE ACCOUNTING IN MANY SITUATIONS
CHAPTER 5. Past Practices in Accordance with GAAP
PAST PRACTICES IN ACCORDANCE WITH GAAP DOES NOT NECESSARILY NARROW DOWN THE APPLICABLE ACCOUNTING TO A SINGLE POINT ESTIMATE FOR ALL ACCOUNTS UNDER ALL CIRCUMSTANCES
COMPLICATIONS OF UTILIZING PAST PRACTICES
PAST PRACTICES WOULD VIOLATE GAAP
CONSEQUENCES OF THE APPLICATION OF PAST PRACTICES BEING IN CONTRAVENTION OF GAAP
PROCEDURAL MITIGATION OF MULTIPLE POTENTIAL OUTCOMES
CHAPTER 6. Target Net Working Capital
APPROACHES TO DETERMINING THE TARGET NET WORKING CAPITAL
CONSIDERATIONS IN DETERMINING TARGET NET WORKING CAPITAL
CONSEQUENCES OF DISCREPANCIES
CHAPTER 7. Transaction‐Specific Adjustments
POTENTIAL CANDIDATES FOR SPECIAL TREATMENT
CONSIDERATIONS IN IMPLEMENTING CUSTOM PROVISIONS
CHAPTER 8. Audited Financial Statements and Auditing Concepts
THE AUDIT OF FINANCIAL STATEMENTS
RELEVANCE OF AN AUDIT AND AUDITED FINANCIAL STATEMENTS IN AN ACCOUNTING ARBITRATION
LIMITATIONS ON THE RELEVANCE OF A FINANCIAL STATEMENT AUDIT IN AN ACCOUNTING ARBITRATION
THE CONCEPT OF PROFESSIONAL SKEPTICISM
CHAPTER 9. Subsequent Events, New Positions, and New Information
SUBSEQUENT EVENTS
PROCEDURAL DEADLINES FOR NEW POSITIONS AND NEW INFORMATION
PART Three. The Accounting Arbitration
CHAPTER 10. Mitigation of Post‐Closing Purchase Price Disputes
DUE DILIGENCE
DOCUMENTATION OF PAST ACCOUNTING PRACTICES IS CRITICAL
THE PRE‐CLOSING AND POST‐CLOSING TEAMS
NEGOTIATION OF DISPUTED ITEMS PRIOR TO THE ACCOUNTING ARBITRATION
CHAPTER 11. Selection and Retention of an Accounting Arbitrator
TERMS OF THE PURCHASE AGREEMENT
CONSIDERATION OF THE QUALIFICATIONS OF THE ACCOUNTING ARBITRATOR
ENGAGEMENT OF THE ACCOUNTING ARBITRATOR
CHAPTER 12. The Parties' Initial Submissions
INTRODUCTION TO THE INITIAL SUBMISSIONS
BACKGROUND OF THE TRANSACTION AND THE DISPUTE
UNIQUE ACCOUNTING OR INDUSTRY CONSIDERATIONS
DISCUSSION OF INDIVIDUAL DISPUTED ITEMS
SUPPORTING DOCUMENTATION
REFERENCES TO AUTHORITATIVE GUIDANCE
GIVE THE ARBITRATOR OPTIONS
CONCLUSION
CHAPTER 13. Further Submissions, Proceedings, and Considerations
REBUTTAL SUBMISSIONS
EXPERT REPORTS AND AFFIDAVITS
INTERROGATORIES AND DOCUMENT REQUESTS
HEARINGS
CHAPTER 14. The Arbitration Award
PROFESSIONAL STANDARDS
APPLICABLE AGREEMENTS
CONSIDERATION OF SUBMITTED INFORMATION
INDEPENDENCE AND IMPARTIALITY
RESOLVE ALL DISPUTED ITEMS
THE WEIGHT GIVEN TO EVIDENCE PROVIDED
ALLOCATION OF THE FEES AND EXPENSES OF THE ACCOUNTING ARBITRATOR
TYPES OF ARBITRATION AWARDS
PART Four. The Disputed Items
CHAPTER 15. Overview of Disputed Items
NET WORKING CAPITAL UNDER GAAP
COMMON DRIVERS OF DISPUTED ITEMS
THE IMPACT OF OTHER CIRCUMSTANCES
MISCELLANEOUS DISPUTED ITEMS
CHAPTER 16. Inventory
GAAP GUIDANCE RELATED TO INVENTORY
BUYERS AND SELLERS CAN HAVE DIFFERING VIEWS REGARDING THE VALUE OF INVENTORY
DISPUTED ITEMS RELATED TO INVENTORY
PRESENTING AND RESOLVING INVENTORY‐RELATED DISPUTED ITEMS IN AN ACCOUNTING ARBITRATION
RESOLVING INVENTORY‐RELATED DISPUTED ITEMS
CHAPTER 17. Accounts Receivable
GAAP GUIDANCE RELATED TO ACCOUNTS RECEIVABLE
BUYER'S AND SELLER'S DIFFERING VIEWS REGARDING COLLECTABILITY
ACCOUNTS RECEIVABLE DISPUTED ITEMS
PRESENTING AND RESOLVING NET ACCOUNTS RECEIVABLE DISPUTED ITEMS IN AN ACCOUNTING ARBITRATION
CHAPTER 18. Contingent Liabilities
THE POTENTIAL IMPACT OF SUBSEQUENT EVENTS ON CONTINGENCIES
LITIGATION ACCRUALS
WARRANTY ACCRUALS
CONTINGENT TAX EXPOSURE
POTENTIAL MITIGATION OF CERTAIN CONTINGENT LIABILITIES
CHAPTER 19. Revenue Recognition and Expense Accruals
REVENUE RECOGNITION
VACATION AND OTHER PAYROLL ACCRUALS
BONUS ACCRUALS
TAX ACCRUALS
PREPAID EXPENSES
PART Five. Other Topics
CHAPTER 20. Governing Agreements and Contractual Choices
PAST PRACTICES IN ACCORDANCE WITH GAAP
TRANSACTION‐SPECIFIC TREATMENT
PROCEDURAL CHOICES
CHAPTER 21. Interaction with Indemnification Provisions
INDEMNIFICATION PROVISIONS
REPRESENTATIONS AND WARRANTIES
THE NET WORKING CAPITAL ADJUSTMENT PROCESS CAN OVERLAP WITH INDEMNIFICATION PROVISIONS
THE COMBINATION OF NET WORKING CAPITAL AND INDEMNIFICATION PROVISIONS CAN LEAD TO A WINDFALL
EXCLUDING INDEMNIFIABLE ITEMS FROM THE NET WORKING CAPITAL CALCULATION
CHAPTER 22. Other Mechanisms, Earn‐Outs, and Locked Boxes
PRE‐CLOSING EBIT/EBITDA ADJUSTMENTS AND DISPUTES
EARN‐OUT ADJUSTMENTS AND DISPUTES
ADJUSTMENT MECHANISMS RELATED TO CAPITAL EXPENDITURES
THE LOCKED BOX: AN ALTERNATIVE TO POST‐CLOSING ADJUSTMENTS?
TRANSACTION FRAUD
CHAPTER 23. International Considerations
U.S. GAAP, IFRS, AND LOCAL GAAP
DIFFERENCES IN LEGAL SYSTEMS
OTHER CONSIDERATIONS
Index
Отрывок из книги
A. VINCENT BIEMANS
GERALD M. HANSEN
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Post‐closing purchase price adjustment disputes before an independent accountant can take the formal form of an accounting arbitration or of an expert determination. There are a variety of legal consequences that may be associated with the selection of one over the other regarding, for example, the accountant's legal powers and the enforceability of the conclusion.
The parties may (or may not) preemptively select one formal approach over the other in the purchase agreement. The dispute resolution process before the independent accountant and the issues at play, however, are typically the same whether the parties opt for expert determination or arbitration.
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