David Anderson is principal of David Anderson & Associates, a Philadelphia forensic accounting firm that provides a full range of forensic accounting services including business valuation, fraud investigation, and fraud deterrence programs in Philadelphia and the Delaware Valley.
As a Certified Valuation Expert, David Anderson, of David Anderson & Associates, has served as a business valuation expert in many traditional divorces. In such cases, he may be retained by the attorney for the out-spouse (the spouse who either does not have an ownership interest in the business at all or who has a non-controlling ownership interest in the business when the other spouse has a controlling ownership interest in the same business) or by the attorney for the in-spouse (the spouse who has either a controlling interest in the business, or a non-controlling ownership interest in the business when the out-spouse has no ownership interest).
In a typical traditional divorce, the in-spouse’s attorney may fight vigorously against providing information which the out-spouse’s business valuation expert has requested to perform the valuation. Depending on the amount of rancor between the parties and level of antagonistic determination between the attorneys, Anderson said he may have to perform the valuation without all the relevant information which he believes is necessary for the valuation. In the absence of such information, the business valuation expert may have to make reasonable assumptions regarding the missing information.
For example, if the out-spouse’s business deducts 100 percent of the cost of a company-provided vehicle, and the out-spouse does not provide mileage logs or other written documentation of business use of the vehicle, the business valuation expert may have to make assumptions regarding the percentage of personal use which is not considered a valid business expense. Such assumptions, said forensic accounting expert Anderson, can form the basis of a difference of opinion between the out-spouse’s business valuation expert and the in-spouse’s business valuation expert (who is usually retained to analyze and rebut the opposing expert’s valuation).
In such situations, the parties often may expend significant time and incur significant costs in using these business valuation experts. Especially when there are significant differences of opinion between the two business valuation experts, the experts’ fees and attorney fees can be even higher. According to Anderson, both spouses may also come away with confusion and misunderstanding regarding how the relevant business’s value was determined because they may only speak with the expert retained by their attorney, and must rely upon the deposition and/or courtroom testimony of the opposing expert without being able to ask their own questions.
Collaborative divorce presents a significant alternative to traditional divorce. While not for everyone, collaborative divorce gives each party and their attorneys the option to work together as a team. As necessary, the team can be expanded to include financial specialists (such as business valuation experts), child specialists (to help with parenting plans and custody arrangements) and coaches (licensed mental health professionals who help the parties address emotional issues). The goal of collaborative divorce is to help the parties determine the key outcomes of their divorce themselves as opposed to having a judge or third-party mediator determine those outcomes.
All the team members in a collaborative divorce, said Certified Fraud Examiner Anderson, have undergone specialized training which helps foster cooperation, respect and open exchange. Yet, because each spouse is represented by a collaboratively trained attorney, he/she can feel confident that his/her views will be adequately considered, and his/her needs will be adequately addressed by the team.
So how does the role of the collaboratively-trained business valuation expert differ in a collaborative divorce?
- First, the business valuation expert is retained by both parties as opposed to by just one party in a traditional divorce.
- Next, because of the joint retention of the business valuation expert, both parties are more cooperative and better able to share all the necessary information needed by the business valuation expert. Thus, there is also usually less of a need to make assumptions.
- Finally, Anderson explained, the business valuation report can be openly reviewed with both parties. Because this is a collaborative effort, the business valuation expert can be more open and informative with both parties, and stand ready to fully answer either party’s questions. This helps to eliminate confusion and lack of understanding regarding the business valuation and business valuation expert’s process.
In a collaborative divorce, the cost for the business valuation expert can be less, because only one expert is retained instead of two, and because the cost of depositions and/or courtroom testimony can be eliminated.
If you need a business valuation professional in Philadelphia, or if you require any other services of a forensic accounting expert in Philadelphia and the Delaware Valley, please contact the Philadelphia forensic accounting firm of David Anderson & Associates by calling David Anderson at 267-207-3597 or emailing him at david@davidandersonassociates.com.
About David Anderson & Associates
David Anderson & Associates is a Philadelphia forensic accounting firm that provides a full range of forensic accounting services in Philadelphia and the Delaware Valley. The experienced professionals at David Anderson & Associates provide forensic accounting, business valuation, fraud investigation, fraud deterrence, litigation support, economic damage analysis, business consulting and outsourced CFO services. Company principal David Anderson is a forensic accounting expert in Philadelphia who has more than 30 years of experience in financial and operational leadership positions and is a Certified Public Accountant, a Certified Valuation Analyst and a Certified Fraud Examiner in Philadelphia.
