Valuations and
Fairness Opinions

Financial Reporting/ GAAP

We combine technical expertise with industry and transaction knowledge to deliver independent objective fair value assessment s for public and private clients that consistently meet and/or exceed auditor requirements; findings which are strictly in accordance with published standards and best practice guidelines. The scope of our financial reporting valuation services includes:

  • Equity-Based Compensation (ASC 718)
  • Business Combinations (ASC 805)
  • Impairment Tests – Goodwill and Other Intangibles (ASC 350 and 360)
  • Fair Value Measurements (ASC 820)
  • Derivatives and Hedging (ASC 815)
  • Debt Instruments (ASC 470)

Tax Reporting and Compliance

The valuation arena involving estate, gift, and income tax-related opinions has evolved significantly over the last ten years, in response to new precedent Tax Court cases and IRS scrutiny of business appraisals that fail to present thorough, well-reasoned, and empirically supported assumptions and conclusions. Prior practices of relying on the “benchmarks” and averages from previous lack of marketability and related studies are no longer acceptable and Eureka has developed a comprehensive set of valuation methodologies and procedures to meet to IRS and USPAP standards. Our scope of valuation services in this practice area includes:

  • IRC 409A – Nonqualified Deferred Compensation (Options, SARs, Profits Interests, Phantom Stock)
  • Gift and Estate Tax
  • FLP/ LLC Discount Studies
  • Undivided/ Fractional Interests in Real Property
  • Charitable Donations
  • Valuation of Stock Transfers in Closely-Held Businesses
  • Restricted Stock Valuations

Employee Stock Ownership Plans (ESOPs)

Valuing corporate stock is a critically important component of implementing and administering an ESOP. Under IRC Section 401(a)(28)(C), a closely-held company that sponsors an ESOP must conduct an annual appraisal of its shares each time the Plan acquires stock and at each Plan year end thereafter. Eureka has significant ESOP transaction experience and performs numerous ongoing annual ESOP valuation updates. Our scope of services includes:

  • Buyout Transactions
  • Sale Transactions
  • Annual Administrative Updates (Form 5500)
  • Debt Restructuring
  • Plan Terminations
  • Peer Appraisal Review

Intellectual Property

Intellectual property is a broad categorical description for the set of intangible assets owned and legally protected by a company from outside use or implementation without consent. The enterprise value of a company is often comprised significantly of both protected and non-protected intangible assets which must be valued for critical business reasons, including transfer pricing, contract negotiation, financial reporting, capital raising, tax compliance and mergers & acquisitions. Our scope of IP valuation services includes:

  • Patents, Copyrights & Trade Secrets
  • Developed Technology / Proprietary Software
  • Brands – Tradenames/ Trademarks
  • License Agreements
  • IP Portfolio & Holding Companies
  • Royalty Rates / Licensing Terms
  • In-Process Research & Development
  • Customer Relationships

Transaction and Advisory

As a licensed broker-dealer with credentialed valuation professionals, Eureka provides a broad range of transaction and technical advisory and reorganization services to assist companies that require financial and valuation expertise. Representing both control and minority buyers and sellers with independent and comprehensive valuation guidance, we are able to deliver thoughtful guidance and arm clients to make informed financial decisions. Our scope of valuation consulting services includes:

  • Transaction Advisory
  • Capital Raises
  • Shareholder Buy-Sell
  • Fresh Start Accounting
  • SEC/ Regulatory Compliance
  • Debt Valuation

Fairness Opinions

A fairness opinion provides an independent, objective analysis of a proposed transaction’s financial aspects. We advise boards of directors, committees, and business owners, regarding the fairness of impending transactions from a financial point of view— ensuring that any fiduciary responsibilities are satisfied. Types of applicable fairness transactions include:

  • Sell-Side and Buy-Side Mergers & Acquisitions
  • Spin-Offs
  • Going-Private Transactions
  • Related-Party Transactions and Minority Investments
  • Down-Round Financing
  • Bond Indenture Requirements and Credit Agreements
  • Transaction Requiring a Shareholder Vote
  • ESOP/ ERISA Transactions

Solvency and Capital Adequacy Opinions

State laws impose certain prerequisites and duties on boards of directors with respect to dividends, distributions and other transfers. Dividends must be paid from surplus, and cannot leave the company insolvent or with insufficient capital. A solvency analysis and opinion helps protect companies and their board of directors or lenders from potential liability relating to fraudulent conveyance claims. Solvency analysis also provides a board and company management with valuable insight as to the equity and cash flow cushion with respect to its ongoing business.

A solvency opinion makes determinations as to whether, after giving effect to a transaction: the company’s assets exceed its debts; the company should be reasonably able to pay its debts as they come due; the company is not left with unreasonably small assets or capital; and there is sufficient surplus to effect a distribution. The types of applicable solvency transactions include:

  • Spin Offs
  • Dividend Recapitalizations
  • Debt Refinancings
  • Going Private Transactions
  • Leveraged Buyouts

Litigation Support

Disputes and litigation matters are an ongoing part of today’s business environment and often involve complex financial, economic and business issues. Eureka’s professionals work in concert with our client’s counsel to develop and define the necessary economic framework and financial analysis to effectively resolve a dispute or litigation matter.
Areas of focus where we have experience, among others:

  • Intellectual Property Disputes
  • Partner/ Shareholder Disputes
  • Business Interruption Claims
  • Economic Damages
  • Breach of Contract
  • Construction Defects
  • Fraud Investigations
  • Divorce Settlements
  • Bankruptcy Adversary Proceedings