Viewpoint on Value Newsletter

Help! When to call an Appraiser

Edited by, Ciro Cuono, Partner, CPA/ABV/CFF, CVA, CGMA
Often attorneys wonder when to contact an expert witness during the litigation process: when a lawsuit is filed, after discovery or once the trial date is set? Many hope to achieve an amicable out-of-court settlement without calling in outside expertise. But delaying an appraisal may come at a price. Most valuators agree that its never too early to contact them if theres a chance litigants will disagree about the value of a business interest. This doesnt mean paying the full appraisal fee up front, but it might require paying a refundable retainer. The initial phases of consulting with an expert can be fairly inexpensive and serve several important purposes. First, consulting an expert tells the opposing side that youre taking the case seriously and are prepared to battle, if necessary. Your perceived preparedness creates an incentive for the opposition to settle. In addition, by engaging an expert early youll obtain essential information during the discovery phase, including an assessment of how much is at stake and whether it makes sense to pursue litigation. Your appraiser also can provide a list of documents and procedures to request from the court. Access to the companys books and records, facilities, and management is essential to accurately valuing a business. Perhaps the most egregious mistake is waiting until the last minute to contact an appraiser. Not only may the quality of a written report be compromised if you wait until just a week or two before trial, but the appraiser might calculate an unexpectedly high or low value, causing you to rethink your strategy at the last minute. Valuation isnt an overnight process. An appraiser needs adequate time to define the assignment, gather facts and analyze the data. Judges frown on hasty valuation decisions. For more information, contact Ciro Cuono at ccuono@odpkf.com.
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Ciro Cuono CPA/ABV/CFF CVA,CGMA Partner ccuono@odpkf.com 914.381.8900