You partnered with fellow former KPM CPAs PC employee Larry Ellison and brought along Aaron Luebbe to launch EllisonLiggett Litigation Consultants Aug. 1. What prompted the move? We really wanted to focus 100 percent on litigation. To do that, we needed to break off. Larry, Aaron and I still worked in tax, so to really be able to devote 100 percent of our time to litigation, the break was the best thing. It’s going great so far, we are having a ball and are moving into our permanent offices next week.
Every day there is something different. Every single case is something different. That’s what I enjoy about it. You can’t do a business valuation until you just sink in and get to know their business. You can’t put a value on something if you don’t understand it. My dad was an attorney. I grew up knowing about the court system and have a great respect for it.
The firm has a primary focus on litigation support. Can you tell me more about what that entails? We work strictly with litigation clients and serve as expert witnesses. One of the things we do is calculate economic damages. For example, say a person is in an automobile accident and has been injured. We handle the financial aspects of that. We calculate the loss of wages that person would have, and you can value things such as household services, if say you could no longer do laundry or clean your home or cook. There is a monetary value for that. Then the personal injury attorney will hire a medical professional to do a life care plan, which is all the future medical expenses the person will incur because of the accident. We then value that life care plan. Obviously, we don’t have the medical expertise, but we can put a dollar amount on it.
Anything financial dealing with litigation, we can probably help with. Personal injury, medical malpractice, wrongful death – we would calculate any of those losses. There could be a business dispute, there could be two shareholders feuding, we can calculate the damages in that. For example, the tornadoes in Branson and Joplin, there were lots of insurance claims for loss of business; that’s something we could help calculate the loss on.
In a personal injury, wrongful death, etc., an attorney would hire us. Not only do we calculate damages, but we issue a report and then have a deposition where we talk about our opinions then actually go to court and explain to the jury or the judge. I enjoy that a lot. You have to defend what you did, how you calculated your numbers. On intangibles, we look at hours. With personal injury, if you couldn’t clean your house we look at how many hours you spent before, how many hours you can spend now, and suddenly you have a loss of hours. There are various sources we can go to to determine the value of those hours.
How does a business valuation work? A business valuation is not simply an appraisal; that’s more for real estate. We don’t do appraisals, but if a company had real estate, we would get it appraised and consider that when we value the business. There are certain standards of value in Missouri including fair market value – for divorce purposes, for gift purposes and for estate purposes. When we value a business, the value we determine when using fair market value is the price at which an asset would change hands between a willing buyer and a willing seller, with neither having any compulsion to buy or sell, and each party knowing all the facts. It’s an arms-length transaction, basically.
There can be numerous reasons for a business valuation, such as divorce. If a couple owns a business together, we can calculate the value of the business for divorce purposes. Or in a family-owned business where the parents want to give part of that business to their children, so they ask for the value of that business. Primarily, we do economic damage calculations and business valuations, but we also do things dealing with fraud.[[In-content Ad]]
