Valuation and Litigation Consulting in the Global Marketplace

The advisory process is becoming more complex as corporations conduct business in more than one jurisdiction. Now, companies that need to renegotiate financial contracts and commitments with their creditors, suppliers and investors often must wrestle with the complexities of culture, language and transnational economic constraints. In addition to that, the process of doing business is constantly being refined because of new legislation, regulations, court decisions and business dynamics.

With all those components at play, effectively consulting on valuation and litigation requires expertise underpinned with keen insight into global relations, a deep understanding of insolvency and restructuring mechanisms and the cultural acumen that breaks down barriers and delivers solutions.

Consider an international cross-border dispute in which Boris Steffen, CPA, ASA, ABV, was a testifying expert. A consortium of United Kingdom, Japanese and Turkish investors provided more than $800 million for a build-operate-transfer contract to construct the world’s largest privately financed water project in Kocaeli, Turkey. The case was before the International Arbitral Centre of the Austrian Federal Economic Chamber. Steffen provided expert testimony regarding certain terms and conditions governing the rights, responsibilities and remedies available to the parties under the contract.

“To do that, I had to assess whether the contract terms and conditions were verifiable, reasonable and probable, and therefore known and measurable as required by the just and reasonable standard, based on analysis of supporting testimony, documentation, facts and methodologies,” he explains.

To manage the time sensitivity and large amount of data necessary in cases like this, Steffen collaborates with the Gavin/Solmonese team.

“We are all highly entrepreneurial, ethical and hardworking, and possess a level of knowledge and experience that allows us to contribute on a variety of assignments and exceed our clients’ expectations,” he says.

Expertise and cultural acclimation

Consulting and testifying experts who provide opinions about business viability or value have unique roles in shaping cases. They must approach the engagement with careful consideration of the client’s needs, and be ready to form a complete and accurate opinion that can be thoroughly defended and withstand an opponent’s reporting. When managing engagements of international scope, it becomes even more complex.

“A keen understanding of cultural differences, diverse values and worldviews is important in our work,” says Pam O’Neill, a qualified expert witness who has particularly strong expertise in financial services. “This cultural competency is a professional skill that is vitally important in what we do.” Many of her prior engagements have included the world’s largest institutions in North America, Europe, Asia, Australia and New Zealand.

To deliver successful client outcomes, expert witnesses involved in international engagements need to be knowledgeable about how culture, context and law are interwoven. David Benick, ASA, cites two examples. In a South African case, he collaborated on writing a rebuttal report and prepared cross-examination trial questions about the value of certain warrants, alleged to have been awarded, for securing financing for the growth of a food distribution company. For a New Zealand case, he advised the board of a financial institution about the value of the company’s stock to add another major shareholder to the ownership structure.

“Both cases illustrate how important it is to understand the value drivers of a particular overseas market, and how to build trust and consensus with a group of individuals from various backgrounds,” he says. “Equally important is our focus on being solutions-oriented. We listen to our clients and never take a cookie-cutter approach. We tailor our services to the exact needs of each client.”

Forensic evaluation

International engagements often include investigations into whether actions were fraudulent. By understanding the finer cultural details of economics, business, financial reporting and accounting, forensic evaluation can tease out even the well-hidden missteps. This is imperative when managing engagements dealing with the Foreign Corrupt Practices Act (FCPA), which prohibits U.S. companies from bribing foreign officials for government contracts and other business.

“These types of engagements are typically high-stakes matters involving fraud and corruption, the outcomes of which affect the future of a business and its leaders,” says Anne Eberhardt, CFE, CAMS, a forensic accountant with years of experience in fraud and other compliance-related investigations. “We set a tone that we are not ‘out to get’ anybody, that instead, we are seeking to help resolve a matter.”

For example, there was an FCPA investigation of a subsidiary of an international company located in a country where the predominant language is Spanish. Eberhardt led the investigation into a whistleblower’s allegations of bribery of government officials through the procurement process, direct payments of cash and gifts, misappropriation of government funding and indirect payments through the use of credits to product distributors.

“Obtaining the cooperation of the individuals at the company was very important, and I was able to do that partly by using my Spanish language skills, as well as showing respect to each individual for his or her role within the company,” explains Eberhardt, whose forensic investigation skills have taken her to Pakistan, Latin America, the Middle East and Europe.

Gavin/Solmonese associates are dedicated to sharing their expertise as well as extending relationships internationally. They will participate in the ABI 11^th Annual International Insolvency & Restructuring Symposiums in Spain this fall, author articles, and serve as sources for journalists covering international insolvency proceedings and forensic accounting issues. Associates like O’Neill, Benick, Steffen and Eberhardt dedicate their time to fully engaging in the global marketplace.

“By participating in events like the ABI conferences, and making ourselves available to share our knowledge with other professionals, we are helping to bring a deeper understanding of how to deliver compelling solutions in international insolvency matters,” says O’Neill.

The firm has recently become a member of the New York International Arbitration Center. It is pursuing more international arbitration engagements as well as appraisal rights, employment and other valuation-related projects.