Solvency

Recapitaliztion

Equity Buyouts

Independence

Solvency Opinions

A common myth is that when two parties are dealing at arm’s length there is no such thing as “too good of a deal.” This view ignores the laws relating to solvency.

 

Solvency Opinions Make Good Sense

If a transaction is done while the seller is insolvent or the seller becomes insolvent as a result of the transaction, then there can be “too good of a deal” and that deal can be undone – even years after it closes. The law which explains this rule, some of which is captured in Section 548 of the Bankruptcy Code, is the law of fraudulent transfer.

FRAUDULENT TRANSFER

Fraudulent transfer exposure can be devastating because civil liability can be imposed without moral fault on the part of the person being sued for recovery and the look-back period can extend up to six years. No actual fraud or normative wrongdoing is required. Civil liability can result simply from having benefited to the detriment of the other party’s creditors where, at the end of the day, there are insufficient assets to satisfy the claims of such creditors.

Fraudulent Transfer occurs when:

RECAPITALIZATION

The recent explosion in dividend recapitalization transactions is responsible for the great increase in the number of Solvency Opinion engagement for our professionals. Other transactions where Solvency Opinions are sought by fiduciaries and by financing sources include:

THE BENEFIT OF INDEPENDENCE 

To be effective, a Solvency Opinion needs to be able to pass judicial muster. Make sure the  firm engaged to provide the Solvency Analysis and Solvency Opinion is not relying on the closing of the subject transaction for any part of its fee.  Solvency advice from an independent financial advisor can assure a board and its’ stakeholders that the decisions made by the board are fair and reasonable.

This is a brief overview of Solvency Opinions. For a more detailed explanation, please review our Solvency Opinion Guide.

Marshall & Stevens is a Independent Solvency Opinion Firm and has been in the valuation business for 90 years and has substantial experience in rendering Solvency Opinions in a wide variety of matters. Employing a high degree of thoroughness and diligence, our professionals bring insight from backgrounds in valuation, law, investment banking, and accounting. Our teams are responsive, nimble and know how to keep the project moving in order to meet the timeline that the transaction requires.

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Contact Marshall & Stevens

How Marshall & Stevens can help with Solvency Opinions

Our Solvency Opinion team collaborates with our internal multi-disciplinary professionals to provide the value analyses and fresh independent opinions to fiduciaries, financing sources and investors for public and private company transactions.

Transaction Advisory

Boards of Directors and Trustees have a fiduciary responsibility for the way noncontrolling shareholders are treated in recapitalization, cash-out dividend, merger, acquisition, divestiture...

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Fairness Opinions

A Fairness Opinion from a disinterested valuation firm provides decision makers with an independent analysis of the transaction, unbiased by commissions and other potential conflicts.

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ESOP Valuations

Our ESOP Valuation professionals provide independent valuation and advisory services for ESOP formation and annual reporting. We work with corporate shareholders, independent trustees, trust committees...

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Questions to ask yourself about Solvency Opinions

  • Marshall & Stevens has staff that serve as receivers and who perform investigative/forensic accounting services. We also assist with bankruptcy and restructuring as may be required.

  • Marshall & Stevens provides valuation, solvency/insolvency opinions, and other consulting services to assist with bankruptcy, restructuring and recapitalization transactions.

  • Marshall & Stevens has a large team of valuation professionals, all of which have industries where they have a particular expertise, including: agriculture, automotive, chemical, construction and engineering, consumer products, energy and infrastructure, entertainment and media, food and beverage, healthcare, hospitality and gaming, manufacturing and distribution, real estate, professional services, technology.

  • Marshall & Stevens values companies and assets around the world. Our staff travels as necessary to conduct site inspections, management interviews and perform other due diligence.

  • We review financial projections against past performance, comparable company performance, and industry forecasts. We ask for support from our clients, as necessary, to make us comfortable with their projections and to provide an explanation in our valuation report.

The Marshall & Stevens Difference

Marshall & Stevens provides Fairness and Solvency Opinions, valuation analyses, investigative accounting, and expert witness services to assist public and private clients with their important transactions and litigation matters.

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Client Highlights

Here’s a snapshot of the work we performed for public and private companies last year

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Solvency Opinions Contacts at Marshall & Stevens

Martin Hanan

CFA, MBA

Founder and President, ValueScope

Background

Martin Hanan is the Founder and President of ValueScope, a Marshall & Stevens company. He works primarily in transaction advisory and financial valuation.

Having almost 40 years of business valuation, transaction and business economics consulting experience and having created two industry-leading firms, Mr. Hanan has managed hundreds of engagements for other professional advisors, and government and corporate clients in a wide array of industries.

Mr. Hanan’s expertise includes the valuation of closely held business interests, financial derivatives, and intellectual property; governance issues including executive compensation; and financial and tax reporting issues including transfer pricing, transactional assistance and methods designed to accelerate corporate cash flow and value.

Mr. Hanan’s strengths include deep insight into econometrics, theory and methodology, business appraisal, and empirical analysis. He is highly analytical, quantitative and creative, and utilizes these skills in assignments ranging from value measurement to value harvesting to expert testimony.

Professional Highlights

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  • The CFA Institute
  • Dallas Society of Financial Analysts
  • Beta Gamma Sigma Alumni - Dallas Chapter
  • Scale Marketing LLC, Director
  • Director, Project Chimps (non-profit)
  • Former Director, Einstein Noah Bagel Corp.
  • Former Director, Luna Carpet, Inc. 
  • Former Director, Board of Trustees, Alliance for Higher Education / North Texas Regional Center for Innovation and Commercialization
  • ValueScope, Inc.
    Founder and President, 2001-present
  • Business Valuation Services, Inc. 
    Founder and President, 1987-2000
  • H.D. Vest Business Valuation Services, Inc.  
    President, 1987
  • Touche Ross & Co. 
    Senior Manager, Valuation Engineering and Appraisal Services, 1986-1987
  • Arthur D. Little Valuation 
    Manager, 1983-1986
  • Motorola Govt. Electronics Group
    Design and Manufacturing Engineer, 1978-1982

John Agogliati

ASA

Senior Managing Director

Background

John Agogliati is Senior Managing Director for Marshall & Stevens Transaction Advisory Services, LLC providing Dispute Resolution & Litigation Support, Fairness Opinions & Solvency Opinions.

Mr. Agogliati has been in the financial valuation industry since 1998. He performs valuation analyses of closely held companies, financial instruments, derivatives, and complex assets for transactions, litigation, estate and gift tax planning and reporting, and financial reporting purposes in a variety of industries. He leads Fairness Opinion and Solvency Opinion assignments.

Mr. Agogliati serves as a valuation consultant and as an expert witness in matters such as business interruption, breach of contract, product liability, shareholder oppression, legal malpractice, and accountant malpractice, among others for matters that have come before bench trials, jury trials and panel arbitrations. 

Prior to joining Marshall & Stevens in 2017, Mr. Agogliati worked in the valuation practice of multiple accounting firms including Deloitte, LLP. Mr. Agogliati earned a Master of Business Administration degree in Finance and a Bachelor of Science in Chemical Engineering with a minor in Economics from Lehigh University.  He is a Chartered Financial Analyst (CFA®) Charterholder and an Accredited Senior Appraiser (“ASA”) in business valuation.   He is a member of the CFA Institute, the New York Society of Security Analysts and the American Society of Appraisers.

Professional Highlights

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  • Member, CFA Institute
  • Member, New York Society of Security Analysts
  • Member, American Society of Appraisers
  • Marshall & Stevens, Inc.
    Senior Managing Director, 2017-present
  • Anchin, Block & Anchin LLP
    Senior Consultant, 2017
  • Berdon LLP
    Principal – Litigation, Valuation and Dispute Resolution Group, 2004-2017
  • Deloitte & Touche
    Manager, 1998-2004
  • Fuss & O’Neill
    Chemical Engineer, 1995-1996
  • Ogden Martin Systems
    Chemical Engineer, 1994-1995

Darleen Armour

ASA

Managing Director

Background

Darleen Armour is a Managing Director for the Financial Valuation and Consulting practice with Marshall & Stevens. She is responsible for all financial valuation assignments in the West Region. Ms. Armour leads the Technical Standards Committee for the national Financial Valuation & Consulting practice.

Ms. Armour has been in the valuation business since 1987. Her experience includes Fairness Opinions, Solvency Opinions and the valuation of businesses, intangible assets, and securities for financial reporting purposes (purchase price allocation and impairment), estate and gift tax reporting, equity compensation/stock options (IRC 409A), ESOPs, and litigation support.

Ms. Armour works with public and private companies in a wide range of industries. She has a great amount of experience in the valuation of entertainment and media companies and their intangible assets including film libraries and music catalogs.

Prior to joining Marshall & Stevens, Ms. Armour has served as Director of BDO’s Valuation and Business Analytics practice, Senior Vice President at FMV Opinions, Inc., and Senior Vice President at Houlihan Lokey Howard & Zukin, Inc.

Ms. Armour served as an Adjunct Professor at California State University, Fullerton teaching a Graduate Level Business Valuation/Mergers & Acquisition Course from 2010 to 2018.

Ms. Armour has been qualified as an expert witness, has provided testimony, and been a neutral third appraiser in arbitration and legal proceedings.

She is an active member of the Association for Corporate Growth having served on the Orange County Board of Directors from 2001 – 2020 and is a member of the Membership Committee for the Los Angeles Chapter of the Association for Corporate Growth.

Professional Highlights

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  • Member, Association for Corporate Growth
    • Membership Committee, Los Angeles Chapter 
    • Orange County Board of Directors, 2001-2020
  • Marshall & Stevens, Inc.
    October 2015-present
      ‣     Managing Director, Financial Valuation & Consulting, 2019-present 
      ‣     Director, Financial Valuation & Consulting, 2015-2019
  • BDO
    Director, Valuation & Business Analytics, 2014-2015
  • FMV Opinions
    Senior Vice President, 2012-2014
  • Cronkite & Kissell
    Principal, 2001-2012
  • Houlihan Lokey
    Senior Vice President, 1987-2001
  • California State University, Fullerton
    Adjunct Professor, 2010-2018
      ‣     Business Valuation/Mergers & Acquisitions (graduate level) 

David Gaynor

ASA, CEIV

National Practice Leader

Background

David A. Gaynor, ASA, is a National Practice Leader for our Financial Valuation Practice and Managing Director of our Healthcare Valuation Practice. Mr. Gaynor’s responsibilities include overseeing the delivery of valuation services to the Firm’s financial valuation clients.

Mr. Gaynor has more than 22 years of consulting experience, specializing in the valuation of businesses and business interests, intangible assets, liabilities, and complex securities in connection with mergers and acquisitions, financing, estate and gift tax planning, charitable contributions, litigation support services, strategic planning, fairness opinions, Employee Stock Ownership Plans (ESOPs), accounting matters, and recapitalizations. Mr. Gaynor has served clients in a wide variety of industries, including the healthcare, food & beverage, restaurant, consumer products, telecommunication and manufacturing industries.

Prior to joining Marshall & Stevens, Mr. Gaynor led the Healthcare Valuation Group at Crowe, LLP. He has also been employed at CohnReznick, LLP and EisnerAmper, as well as Management Planning Inc. and Pluris Valuation Advisors, LLC.

Mr. Gaynor earned a Bachelor of Science in Finance from The College of New Jersey in Ewing, NJ.

Mr. Gaynor is an Accredited Senior Appraiser (ASA) in business valuation with the American Society of Appraisers. In addition, Mr. Gaynor is a Member of the Appraisal Issues Task Force (AITF), a Board Member of the Towson University Family Network, and a Member of the Montgomery Township, NJ Budget and Finance Committee. Mr. Gaynor is a frequent writer and speaker on valuation topics.

Professional Highlights

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  • Member, Appraisal Issues Task Force
  • Board Member, Towson University Family Network 
  • Member, Montgomery Township, NJ Budget and Finance Committee
  • Marshall & Stevens, Inc.
    December 2019-present 
      ‣     Managing Director, Northeast Financial Valuation Practice Leader, 2023-present 
      ‣ Managing     Director, 2019-2023
  • Crowe
    February 2014-November 2019
      ‣     Managing Director, Healthcare Valuation Services Leader, 2019
      ‣ Senior Manager, 2014-2019
  • CohnReznick LLP 
    Senior Manager, 2012-2014
  • Pluris Valuation Advisors LLC
    Vice President, 2010-2012
  • Management Planning, Inc. 
    Vice President, 2008-2010
  • Valuation Research Corporation
    Vice President, 2007-2008
  • Crowe Horwath LLP
    Manager, 2004-2007
  • EisnerAmper
    Supervisor, 2002-2003

Chase Hoover

CFA

Managing Director

Background

Chase Hoover is a Managing Director with Acuity Advisors, a Marshall & Stevens company.

Mr. Hoover is principally responsible for project leadership and execution on mergers & acquisitions, ESOP transactions, ESOP valuations, and other valuation advisory engagements and transactional mandates. He works closely with business owners, executives, trustees, and other adjacent professionals in the structuring and negotiation of complex transactions, and the delivery of comprehensive transaction opinions.

Mr. Hoover earned his BS in Business Administration with a concentration in Finance and a minor in Economics from Chapman University, where he graduated magna cum laude.

Professional Highlights

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  • CFA Institute and the CFA Society of Orange County
  • The ESOP Association, Member of the Advisory Committee on Finance Issues
  • National Center for Employee Ownership
  • Acuity Advisors
    July 2015-present
       ‣ Managing Director, 2022-present
       ‣ Vice President, 2019-2022
       ‣ Manager, 2017-2019
       ‣ Senior Analyst, 2016-2017
       ‣ Analyst, 2015-2016
  • KPP Financial Inc.
    Market Research Intern, 2015
  • Hamilton Lane (fka. 361 Capital)
    Analyst Intern, 2013
  • BOK Financial (fka. CoBiz Financial)
    Wealth Management Intern, 2012

Simon Koo

CFA

Director

Background

Simon Koo is a Director in the Financial Valuation and Consulting Practice of Marshall & Stevens Incorporated.

Mr. Koo provides Fairness Opinions and Solvency Opinions for public and private company transactions. He performs valuations of closely held businesses, portfolio companies of private equity and business development companies, as well as intellectual property and other intangible assets, and complex securities, including debt, preferred stock, options and warrants, and contingent consideration using Monte Carlo Simulation and Option Pricing Model methodologies.

He serves clients in a variety of industries including technology, media, pharmaceutical and life sciences, health services, industrial products, retail and consumer products, and food and beverage industries. Engagements are typically provided to assist clients with buy/sell consideration, financing and recapitalization, financial reporting, tax planning and reporting, and matters of dispute.

Mr. Koo joined Marshall & Stevens in 2019. Prior to Marshall & Stevens, he worked in the valuation practice of PWC, Grant Thornton, and RSM.

Professional Highlights

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  • Member, CFA Institute
  • Marshall & Stevens, Inc.
    Director, Financial Valuation & Consulting, 2019-present
  • RSM US LLP
    Supervisor, 2018-2019
  • PwC
    Valuation - Senior Associate, 2016-2018
  • Grant Thornton LLP
    Valuation Associate / Senior Associate / Manager, 2011-2016
  • Ardour Capital Investments
    Equity Research Associate - Intern, 2010-2011

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