In today’s current economic environment, merger and acquisition (M&A) activity has reached new heights, fueled by low interest rates, high stock prices, and the competition for high-performing companies by private equity firms and strategic buyers. As both the number and size of deals increase, the potential for post-closing disputes to occur rises commensurately.

Transactional disputes can arise for a variety of reasons, but the most common causes of disagreements from an accounting and financial perspective relate to the areas of working capital, earn-outs, and representations and warranties. And, in our experience, we find that post-acquisition disputes are caused by many factors, but most often due to 1) complicated, confusing, and poorly written deal language, definitions and computation formulas, and 2) purchase agreements, disclosure statements, data sources, and financial information that may be incomplete or inaccurate.

At Green Flash Forensics, we recognize that to effectively advise our clients through M&A transaction disputes, we must have a deep understanding and appreciation of the parties and individuals involved, the mechanics of the deal agreement, and the specific areas of dispute. When helping clients in responding to M&A disputes, we provide the following services:

• Reviewing relevant information related to the dispute, including the purchase agreement and disclosure schedules, information provided during due diligence, preliminary financial analyses prepared by the parties, and correspondence between the buyer and seller
• Preparing financial analyses, conducting accounting research, and issuing or supporting written submissions related to the disputed items
• Evaluating, reviewing, and responding to submissions made by opposing parties
• Serving as a neutral accountant or independent arbiter to resolve a working capital or earn-out dispute.