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Valuing the Closely Held Business
The assessment of replacement compensation generally includes a review of industry statistics and other pertinent factors, including the experience and judgment of the valuation expert. Before a level of replacement compensation can be determined, the valuator must consider numerous factors including, but not limited to, the types of duties that the owner performs in his/her position with the business, the owner's education and level of experience, and the number of hours the owner works in comparison to non-owner employees who perform similar duties and have a comparable educational and experience background as the owner. In addition, the size of the company, the complexity of its organizational structure and the geographical region of the country may impact the decision-making process relative to the level of replacement compensation to utilize.
In order for replacement compensation to have a true economic basis, it must be reasonable for the circumstances at hand. One of the most developed areas of the law involving replacement compensation issues evolved from tax court decisions that were argued for purposes of assessing the ordinary and necessary nature of the expense for executives and/or related parties. In addition, the tax courts have ruled, and have provided guidance, within the context of valuation for estate and gift tax purposes. As a result of the numerous tax court decisions that have been handed down on this subject area, it can be helpful to look to those court decisions for guidance in matrimonial cases.
The DOJ's Corporate Enforcement Policy: One Year Later
The DOJ's Criminal Division issued three declinations since the issuance of the revised CEP a year ago. Review of these cases gives insight into DOJ's implementation of the new policy in practice.
The DOJ's New Parameters for Evaluating Corporate Compliance Programs
The parameters set forth in the DOJ's memorandum have implications not only for the government's evaluation of compliance programs in the context of criminal charging decisions, but also for how defense counsel structure their conference-room advocacy seeking declinations or lesser sanctions in both criminal and civil investigations.
Use of Deferred Prosecution Agreements In White Collar Investigations
This article discusses the practical and policy reasons for the use of DPAs and NPAs in white-collar criminal investigations, and considers the NDAA's new reporting provision and its relationship with other efforts to enhance transparency in DOJ decision-making.
Bankruptcy Sales: Finding a Diamond In the Rough
There is no efficient market for the sale of bankruptcy assets. Inefficient markets yield a transactional drag, potentially dampening the ability of debtors and trustees to maximize value for creditors. This article identifies ways in which investors may more easily discover bankruptcy asset sales.
Compliance Officers: Recent Regulatory Guidance and Enforcement Actions and Mitigating the Risk of Personal Liability
This article explores legal developments over the past year that may impact compliance officer personal liability.