- Buy/sell advice
- Strategic planning and acquisition integration
- Operational productivity and profitability
- Financial due diligence
- Qualitative and quantitative modeling
- International mergers and acquisition execution
- Tax and accounting treatment
- Technology investment assessment
- Reorganizations and insolvency analysis
- Forensics and dispute management
Financial Assessment of Rail and Highway Government Agency
The Advisory Services Group of Rachlin was engaged to provide an in-depth financial assessment of the financial management practices of a government agency responsible for rail and highway transportation.
Rachlin identified the financial problems and shortcomings in the finance and accounting operations of the entity that threatened the completion of a major rail expansion, if not addressed, would result in an approximately $2.8B shortfall in funding to build this new rail expansion. Some of the issues related to financial uncertainty and instability that were identified include:
- Underfunded expenditure plan and inadequate funding for planned capital projects
- Underfunded asset maintenance
- Underfunded pension and retiree plans
- Over-reliance on reserves to support operations
- Over-reliance of volatile revenue sources to support operations and capital projects
- Unrealistic fare box recovery expectations
Historically, a perception existed among the entity’s constituents that the organization did not have effective financial management. The entity even experienced a grand jury investigation into mismanagement.
Rachlin identified, through its assessment, areas of shortcomings in the financial management and provided recommendations to address and overcome these shortcomings and to begin to put the entity on a path to sound, prudent and conservative financial management.
Financial Advisor to the Trustee and Receiver of Major Ponzi Scheme
In a major Ponzi scheme in Florida involving over $300 million, Rachlin was retained as financial advisors to the Trustee and Receiver. As consultants, Rachlin assisted with the identification and recovery from avoidance actions and litigation involving other parties, and also performed claims analysis for an investor base of over 2,000 claimants. As accountants, Rachlin maintained the books of the Estate and the Receivership and helped to resolve numerous tax related issues. The defrauded investors recovered almost 65% in this proceeding.
Implementation of Economic Damages Model to Calculate Breaches of Employment
Rachlin prepared a regression-analysis-based economic damage model to calculate loss of income incurred by a computer software company resulting from breaches of employment contracts and non-compete agreements by former employees.
Mortgage Warehouse Loan Advances Tracking
Our economic damage team developed a database management application to track funding, shipping, sale and repayment of mortgage warehouse loan advances and related collateral security. We further developed an expert report of damages in connection with litigation resulting from a fidelity bond company’s denial of claim relating to collateral sold out of trust.
Economic Damage Calculations for Ex-Employees Denied Compensation
Our team of professionals prepared economic damage calculations for each of several partners who left a major consulting firm and were denied payments relating to salary, profit-sharing, capital distributions, and unbilled time and uncollected receivables. We analyzed and critiqued damage calculations prepared by the opposing expert relative to lost profits alleged to have been incurred by the consulting firm.
Receivership for High Profile Medicare Fraud Conviction
Receivership for forfeited assets from a high profile medicare fraud conviction in South Florida. Liquidated over $44 million worth of assets. Within a year, the $44 million included:
- $16 million business as a going concern (approx). Post receivership, this business continued operating in an effort to keep the employees employed, avoid creditors losing money, and to get as much value from the business towards the forfeiture amount. The forensic team helped run the business to keep it afloat until the sale of the assets.
- $21 million commercial building in Miami with tenants
- $5.5 million in 3 warehouses/ commercial property in Miami
- $3 million in personal property including a plane, cars and a yacht Close to $400,000 residential property in Savannah, GA
- $5.1 million residential property in the Florida Keys is under contract and ready for closing. $800,000 commercial property is under contract in Georgia
The firm was commended by the Federal Judge for liquidating the highest amount of assets of this type of forfeiture for medicare fraud ever in the United States.
Appointment in Bankruptcy Court as Plan Administrator of a Consensual Plan of Reorganization
Appointment in bankruptcy court as plan administrator of a consensual plan of reorganization. Responsibilities included completing construction of a $100 million-plus interrupted condominium project and completing and closing project sales, while maximizing the value of the project for interested creditors.
Review of Operations and Financial Structure of Major Florida Condominium Developer
Directed a team of real estate, audit, finance, tax and technology professionals to critically review the operations and financial structure of a major Florida condominium developer. Rachlin’s recommendations resulted in the developer streamlining its accounting procedures, updating information systems, improving investor communications, creating a more tax-efficient structure and establishing human resource and loan compliance departments.
Advisory on Increasing Franchise Value of South Florida General Contractor
Provided consulting services to a South Florida general contractor on increasing the operational efficiency to his accounting and contact management systems and policies and procedures to better position his company for increased growth, all in the interest of increasing franchise value to position the company for sale in three to five years.
Expert Witness & Testimony Services for South Florida Condominium Developer
Engaged by a South Florida developer of a $4 million high-end residential condominium project to provide expert witness consulting and testimony to delineate and quantity cost overruns and defective work as an offset to the general contractor’s claim for contract and delay damages. Rachlin’s work formed the basis for the client’s claim that the general contractor owed over $4.7 million (including liquidated damages of $1.7 million).
Advisory on Liquidation Value of Major Shopping/Office Complex
Representing the beneficiaries of a Washington, D.C. based charitable trust, provided an expert report regarding the likely liquidation value of a major shopping/office complex located on Florida’s west coast. The engagement was extended to include “shadow oversight” of the trustee during his effort to market and sell the property.
IRS Criminal Investigation Case Review of Understatement in Taxes
Rachlin professionals were engaged to assist an attorney and his client on a criminal tax case at the 12th hour of the investigation and facing indictment. The client had been under an IRS Criminal Investigation for almost four years and IRS was proposing an understatement of over $600,000 over a two year period. Rachlin’s cadre of forensic accountants and former special agents with IRS-Criminal Investigation were retained under a “Kovel letter”, quickly evaluated the documentation available, and determined there were both technical and procedural problems with the Government’s case. The client’s attorney had previously tried to dissuade the IRS and later Department of Justice attorneys in prior meetings from going forward with the investigation. Rachlin professionals assembled a report reflecting potential weaknesses identified in the case and presented new arguments to the US Attorney’s office for consideration. The meeting resulted in a sealed indictment to protect both the Government’s interest as well as any unnecessary negative publicity to the client. Currently, the indictment has remained sealed for almost a year as the Government attempts to addresses the weaknesses identified in their case.
Critique Damage Theory from Breach and Termination of Exclusive Distribution Agreement
A manufacturer of a specialty product was found to be liable to a distributor for the breach and termination of an exclusive distribution agreement. Rachlin was engaged by the manufacturer’s counsel to review the opposing expert’s report and critique the damage theory and methodology used to calculate damages. Numerous flaws, inconsistencies and errors in the opposing expert’s report were found, which were communicated to counsel who then used such information to effectively impugn the opposing expert’s damage calculations during cross-examination. In addition, we prepared a competent report calculating damages consistent with the findings of the arbitrators, the agreement between the parties, and existing circumstances affecting the parties’ performance under the agreement. We provided valuable testimony before an arbitration panel over a two-day period. The final award of damages to the distributor was in an amount that was less than 10% of what the opposing expert had calculated.
Expert Testimony on Behalf of FDIC for Fidelity Bond Claim
We prepared the adept report and provided expert testimony on behalf of the FDIC in connection with a fidelity bond claim seeking to recover losses incurred by a multi-million dollar New York savings bank. The testimony reflected the amount and timing of losses incurred in connection with the bank’s investments in and advances to various real estate development joint ventures. As a result, the FDIC filed a motion for summary judgment and the court granted the motion and awarded the FDIC damages equal to the policy limits under the fidelity bond.
Damage Model Developed to Review Cost Overruns
Rachlin was retained by counsel for a large contractor that specializes in both interior and exterior building finishes in connection with claims asserted against a major national general contractor. The claims related to cost overruns caused by deficient preparatory leveling and surfacing work performed by the general contractor. We developed a damage model relating to the cost overruns and quantified amounts relating to additional framing, drywall finishing, scaffolding and corrective leveling.
Representative Damages Determination Engagements
Other examples of representative damages determination engagements include the following:
- Prepared regression analysis based damage model to calculate loss of income incurred by a computer software company resulting from breaches of employment contracts and non-compete agreements by former employees.
- Developed database management program to track funding, shipping, sale, and repayment of mortgage warehouse loan advances and related collateral security. Prepared expert report of damages in connection with litigation resulting from a fidelity bond company’s denial of claim relating to collateral sold out of trust.
- Evaluated and quantified amounts relating to partnership liquidations, profit allocations, and partner distributions. Prepared analyses, computer model, and trial exhibits relating to distributions projected/made to partners of a limited partnership which owned commercial office property in New York City.
Financial Due Diligence
Rachlin performed due diligence services on behalf of a $4 billion multinational staffing
company who sought to purchase a $700 million Midwest-based staffing company doing business
in 20 states.
As the target company had acquired a variety of complimentary businesses, our approach included
developing an understanding of several business models and assessing the efficiency of the target's
integration plan. The transaction team included 18 professionals from the tax, assurance, technology,
real estate and forensic accounting areas, who were able to complete their findings in less than
four weeks. Rachlin has performed five similar assignments for this client.
Bankrupt Company Sale Administration
Rachlin conducted due diligence in connection with the sale of a bankrupt $20 million seafood
company in Seattle, WA. Rachlin's analytics were used in preparing the material distributed to around
350 domestic and international seafood companies who were identified as possible purchasers of the
company. Rachlin directed the sale of the company, pursuant to Chapter 363 of the bankruptcy code,
in less than six months.
International Transaction
As a member of Baker Tilly International, we were
engaged by a Russian software manufacturer to evaluate the merits of software contracts of an
Israeli company with operations in Boca Raton, FL. These contracts for products and services were in
multiple languages, currencies and licenses spread over 34 countries.
Corporate Integration Support
Rachlin continues to support the merger and acquisition initiatives of a private equity firm,
investing in such far-reaching industries as tire re-treading, manufactured housing, advertising,
security, and PEO/temporary staffing.
Profitability Modeling
An investment partnership engaged Rachlin to evaluate the holdings of a multinational
oil company who sought to sell its Caribbean retail, commercial and aviation fuel businesses.
Rachlin's work included an analysis of:
- The competitive market
- Financial performance
- Assessment of management capabilities
- Real estate holdings
- The cost to replace the current brand
Real Estate Finance
Rachlin originated and negotiated acquisition financing on behalf of a developer actively involved in
the development of a mixed-use project in Key West, FL. Our presentation, including loan underwriting criteria,
financial model, development timetable and market analysis, was used by the bank as the core document
leading to an early loan approval.
Real Estate Development
Rachlin consulted for the developer of a $400 million luxury condominium and condominium hotel property
located in Palm Beach, FL. Our advice extended to issues that included unit mix, unit size, pricing and project
amenities. We also assisted the developer in selecting other professionals, including lawyers, feasibility analysts,
engineers, general contractors and luxury hotel management companies.
Accounting Forensics and Business Valuation
We conducted forensic investigations and related valuations of a general contracting company whose primary
business was the development of Section 8 housing projects. The analysis required the valuation of projects
under development as well as completed projects held in the company's investment portfolio. The valuation models
we developed contributed significantly to facilitating settlement of this matter prior to trial.
Damage Determination
We prepared a regression-analysis-based economic damage model to calculate loss of income incurred by
a computer software company resulting from breaches of employment contracts and non-compete agreements by
former employees.
Damage Determination
We developed a database management application to track funding, shipping, sale and repayment
of mortgage warehouse loan advances and related collateral security. We further developed an expert report
of damages in connection with litigation resulting from a fidelity bond company's denial of claim relating to
collateral sold out of trust.
Damage Determination
We prepared econmic damage calculations for each of several partners who left a major consulting firm
and were denied payments relating to salary, profit-sharing, capital distributions, and unbilled time and uncollected
receivables. We analyzed and critiqued damage calculations prepared by the opposing expert relative to lost
profits alleged to have been incurred by the consulting firm.
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