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We have distilled decades of experience at the intersection of law, business and finance into a suite of articles to help our clients make sense of business valuation, forensic accounting, and litigation support. Please visit our site regularly for our latest content.

Since our last blog was published, the New York State Assembly gave final passage on July 1st to no-fault divorce, clearing the way for New York State to allowing couples to end their marriages quickly when one spouse believes the union is over. The new measure, which requires one spouse to swear under oath that the relationship has broken down irretrievably for at least six months, is the final piece of a legislative package enacting the most sweeping changes to the state’s divorce laws in 40 years. This final legislative approval comes after what one member of the Assembly called “an awfully long and hard battle.” The bills now await Governor Paterson’s signature. No-fault divorce has long been opposed by the Catholic Church, with the view that the legislation would make divorce easier; feminists argued that no-fault did not address the concerns of poorer women. The National Organization for Women of New York State has found itself on the same side of the issue as the Church, although the New York City chapter of NOW supports the legislation. Marcia Pappas, president of the New York State chapter of NOW, has written recently, “No-fault can take away the bargaining leverage of the non-moneyed spouse—and that is usually the woman….In fairness, any partner to a marriage should be provided with notice that the other partner wants a divorce and given an opportunity to negotiate the terms for the divorce. Often, there is fault with ‘divorce on demand,’ not only can the more moneyed […]


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Forty years ago, no-fault divorce was a controversial topic. Among the arguments made against it was that the full-time homemaker would lose leverage if unilateral divorce became a reality. But the American household has changed considerably over the years: more and more, two-parent earner households are the norm, and the working mom/stay-at-home dad model has become commonplace. Since 1969, when Gov. Reagan signed the nation’s first no-fault divorce law, the country has gradually fallen into place with no-fault divorce legislation—except for New York State. But that seems about to change. On Tuesday, June 15, the State Senate’s Democratic Majority passed a legislative package that seeks to finally end New York’s status as the remaining state without no-fault divorce. The No-Fault Divorce bill restructures New York State’s matrimonial law to streamline the process and improve the outcome of divorce for New Yorkers. The bill, approved 32-29, would allow no-fault divorce after a marriage has “irretrievably” broken down for six months or more and after all financial and custody issues are resolved. The legislative package must still pass the State Assembly, which is considering two bills that would adopt some version of no-fault divorce. Senator Ruth Hassell-Thompson, a Democrat from Westchester and the Bronx who was chief Senate sponsor of the bill, said after the vote, “What I’m hoping is that because the Assembly now has a partner in the Senate, that will give impetus to help the Assembly move along.” Under current law, New York couples who want to divorce must fault […]


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On Wednesday, June 9, 2010, John Jay College, the New York State Council on Divorce Mediation, and the Family & Divorce Mediation Counsel of Greater New York sponsored a panel discussion on the Proposed Maintenance Guidelines. The panel was comprised of three attorneys, Steven Abel, Esq., Alton L. Abramowitz, Esq., Emily Ruben, Esq. and forensic accountant and business valuation expert, Mark S. Gottlieb, CPA. The program was moderated by Rod Wells, CFP. While the panel and the audience primarily agreed the intent of the proposed legislation has merit – there was some concern whether the proposed legislation addresses the need of a mechanism to calculate maintenance awards. Emily Ruben, Esq. (Attorney-in Charge of the Brooklyn Neighborhood Office of The Legal Aid Society) pointed out that many couples going through a divorce do not have substantial assets to divide and that their greatest asset of the marriage is frequently the income of the more-monied spouse.   That being said, moderate and low-income spouses usually cannot afford the often costly litigation required to establish a right to maintenance. Considering the unpredictable and inconsistent climate of maintenance awards, the less-monied spouse will usually settle, albeit under some pressure, to avoid costly litigation. The New York legislative houses are each considering possible legislation to establish guidelines for post-marital income sharing not dissimilar to the Child Support Standards Act. By establishing guidelines for both the amount of maintenance to be awarded and the duration of the award, post-marital guidelines would provide the consistency and predictability for spousal support […]


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Major Changes in New Jersey’s Palimony Law

Posted in Divorce & Matrimony, on Apr 2010, By: Mark S. Gottlieb

In recent years, we have seen an increasing number of cases dealing with palimony filed in the New Jersey courts. Palimony has long been based on the law of contracts, where an oral promise can be enforced if a party relies and acts on it to their detriment. But a new law came into being during the last days of the Corzine Administration, requiring that in order for a palimony agreement to be enforceable, it must now be in writing and be executed with the independent advice of legal counsel.   Recently, forensic accounting expert, Mark S. Gottlieb,  met with Stephanie Hagan, a Family Law attorney and Partner in the firm Donohue, Hagan, Klein, Newsome and O’Donnell PC, to discuss the enactment of the Statute and its effect on couples. Both of these professionals have extensive experience in matrimonial and family law matters.   Although early palimony decisions found that cohabitation was a necessary element in a palimony action, this concept was eventually overruled by the New Jersey Supreme Court in 2008 when the Court ruled in Devaney v. L’Esperance .  In this case cohabitation was no longer a required factor. The Court found that a marital-type relationship is essential to any palimony claim; however, cohabitation is not essential to a determination of a marital-type relationship.  In many instances married couples may be separated by employment, military, or educational opportunities. Hence, not all married couples live together on a full-time basis. According to Ms. Hagan, there is no doubt that […]


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Madoff Scam Hits the Divorce Court

Posted in Divorce & Matrimony, on Apr 2010, By: Mark S. Gottlieb

Over on New Jersey Family Legal Blog, I saw a post that editor Eric Solotoff, a family law attorney at Fox Rothschild wrote that struck my interest. Upon reading the post, Madoff Mess Hits Divorce Court, I knew I had to sit down with Eric for a podcast, to discuss what all this means in respect to forensic accounting.     For context, Justice Saralee Evans in Manhattan recently decided on a case regarding a divorcing spouse who attempted to revise his agreement with his wife. First, some background for our readers who may not be that familiar with the case: After thirty years of marriage, a husband and his ex-wife spent nearly two years debating the value of their home in Scarsdale, The husband’s law partnership, and their Manhattan apartment. The two agreed on at least one thing: an account they opened during their marriage with Bernard Madoff Investment Securities LLC was worth $5.4 million. As part of a 2006 equitable distribution agreement, the husband claimed he paid his wife some $2.7 million, which represented what he thought was his ex-wife’s fair share of their investments with Madoff. But after Madoff’s arrest in December 2008, the husband attempted to redo the agreement, claiming it was based on a “material, mutual mistake” and resulted in a windfall for his ex-wife. After the husband learned that he and his wife had “been tricked by a sophisticated fraudster,” he sought to reform the divorce agreement. The husband claimed the agreement did not accomplish […]


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Since the Federal Rule of Civil Procedure 26 was last amended in 1993, it has required parties to submit expert reports for all testifying experts. Those amendments have been interpreted by some courts to allow discovery of all draft expert witness reports and all communications between counsel and testifying expert witnesses. In the view of many litigators, the experience under those changes revealed significant practical problems. Allowing such broad discovery significantly expanded expert discovery; it also irrevocably led attorneys and experts to take counteractive measures. However the steps taken to avoid creating discoverable drafts or communications has predictably resulted in inefficient and costly litigation. According to Charles S. Fax in Litigation News, Rule 26, “has bedeviled lawyers in dealings with expert witnesses. However, proposed amendments promise to resolve the difficulties caused by the present rule.” These proposed amendments, the first major revision in nearly two decades, are to take effect in December of this year. No longer would Rule 26 allow full discovery of draft expert reports and require broad disclosure of any communications between an expert and trial counsel. Instead, those communications would come under the protection of the work-product doctrine. The amendments specifically extend work-product protections to drafts of both expert reports and expert party disclosures under Rule 26, and to attorney-expert communications. With the prohibition of discovery about who said what to whom—a matter of no interest to jurors—depositions would now be allowed to focus on the expert’s analysis of the case. What will still be allowed, […]


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As most forensic accountants and business valuators know, post-acquisition disputes between an acquirer and target company are on the rise. These conflicts can be disruptive, time-consuming and expensive. To help in successfully resolving a dispute, the post-acquisition advisor needs to be extremely well versed in accounting, business valuation, economics, finance and litigation. In times when bank failures and bankruptcies are not uncommon, resolving post-acquisition disputes can be a formidable challenge. The most common disputes involve post-closing adjustments for working capital or net assets, indemnity or fraud claims, and earnout disputes. In a dispute involving both working capital and indemnity claims, for example, working capital claims are typically measured on a dollar-for-dollar basis while indemnity claims can be measured dollar for dollar, over a finite period or into perpetuity. The measurement of damages into future periods is predicated on assessing whether the misstatement will affect future periods; the buyer’s expectations were based on future performance; the business was significantly devalued after the acquisition; and the misstatement would have been “material” to a “willing buyer.” Potential disputes in mergers and acquisition transactions can often be just as complex as the deals themselves. It is the acquirer that instigates a dispute on the grounds that it’s unable to complete the deal because of financial shortfalls, although there are exceptions. In a 2009 roundtable discussion published in Financier Worldwide, one participant commented: “The economic downturn has significantly increased the number of commercial disputes, and it has changed the nature of dispute resolution. Where once parties could […]


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Parenting Plans Considerations When Divorcing

Posted in Divorce & Matrimony, on Mar 2010, By: Mark S. Gottlieb

I recently sat down and did a podcast with Leonard Florescue, a family law attorney at Blank Rome LLP, who advises clients primarily in complex matrimonial matters. We discussed the role parenting plans play in the divorce process.   Among the most important aspects of family law are custody and parenting plan issues. The family law practitioner is expected to take great care to work with his or her clients to create a viable parenting plan, which is an agreement between parents, who are either divorcing or who have never married. In the simplest terms, a parenting plan establishes who will spend time with the children and when and under what circumstances. The parenting plan also determines who makes the major decisions about education, medical care and other important issues. A good parenting plan is necessary in promoting harmony and alleviating stressful situations for both parents and children. There can be serious repercussions when parents have either a poorly though-out parenting plan or no plan at all. In an organizational or government hierarchy, there’s a single person or group with the most power and authority, and each subsequent level represents a lesser authority. Parents must create a “hierarchy” of their own. Time sharing is often a very stressful topic for parents. When outlining shared parenting schedules, parents must try their best to avoid potential areas of stress. It’s also advisable for parents to create a formula for the events they are anticipating for the first years of the parenting plan’s […]


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Defining Fair Value In Shareholder Disputes

Posted in Shareholder Disputes, on Mar 2010, By: Mark S. Gottlieb

This week, I sat down with Peter Mahler, a corporate attorney at Farrell Fritz, who is widely known as an authority on corporate dissolution and valuation proceedings involving closely-held businesses (which he blogs about over on New York Business Divorce Blog).   First, we discussed how there are times when the accounting and legal professions meet and form a synergy that complements one another. But there are also times when terms and definitions must be distinguished and defined based upon facts and circumstances. The concept of “Fair Value” is one of those terms. A federal Appeals Court once remarked that “the valuation of a closely held company is an inexact science, some might say an art.” The Model Business Corporation Act in 1984 created the right of a shareholder to dissent from corporate decisions and obtain payment of the value of his or her shares. The shareholder is entitled to receive the “fair value” of his or her shares in case of dissent. But the simplicity of the term “fair value” is misleading, as there are many questions to be answered and important factors to be considered in order to reach such “fair value.” Minority shareholders have been granted a number of rights to protect their position inside a corporation and advance their interests. One of these rights is the appraisal right–the right to dissent and obtain payment of fair value of their shares. Fair value can be defined in a number of ways and each definition may be correct. […]


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