Forensic Accounting, Expert Witness Testimony & Litigation Services

Parente Randolph’s Forensic Accounting & Litigation Services Group specializes in a number of practices across a breadth of industries. For testimonials from each specialty area, below, please click on the title.

Acquisition/Post-purchase Price Disputes

A publicly traded agribusiness company sold the stock and assets of a substantial operating subsidiary to a competitor. After the sale, the buyer sued the company for various breaches of representations and warranties and fraud. The Parente Randolph forensic accounting team was retained to assist the seller in interpreting Generally Accepted Accounting Principles (“GAAP”) regarding deferred tax issues, as well as potential damages, if any. After testimony at arbitration, the awarded resolution of the issues was substantially less than the plaintiff’s claim.

The seller of a private construction-related equipment business was sued after the acquisition for potential damages of over ten (10) percent of the purchase price for shortfalls in the closing net worth. The disputed items primarily related to accounts receivable, inventories, accounts payable and accrued income taxes. The Parente Randolph forensic accounting professional was successful in refuting the various claims. As a result, the seller was able to keep a majority of funds held in escrow and was not required to return a portion of the purchase price to the buyer.

Antitrust/Forensic Accounting

A major construction company located in the Southeastern United States was indicted for an alleged bid rigging on significant international construction contracts funded by a U.S. Government agency. The alleged criminal activities were conducted by a Joint Venture in which a subsidiary of the construction company had an ownership interest. The plaintiff sought to pierce the corporate veil and attach the assets of the parent company. Parente Randolph was retained by counsel in the civil dispute to provide forensic accounting support and as an expert witness. The Parente Randolph forensic accounting professional analyzed the relationships between parent, subsidiary, Joint Venture, and others to establish the financial facts and determined what benefits were or were not received by the parent company.

Construction Matters

Several sureties, owners, design professionals, and contractors engaged Parente Randolph to analyze their construction costs, overruns, delays, and claims for damages asserted by various contractors and subcontractors. The projects included new construction and renovations of existing resorts, hotels, schools, universities, condominiums, high-rises, convention centers, and sports complexes.

Parente Randolph was retained by a Joint Venture to evaluate asserted damages amounts associated with the construction of a Philadelphia Sports Complex. Damages were asserted by the owner and numerous subcontractors. The Joint Venture also asserted counter claim damages for design errors, unresolved change orders, unpaid contract balances, and delay and acceleration damages.

Parente Randolph provided forensic accounting and litigation support to a Municipal Owner related to the construction of a $140 million convention center. The general contractor asserted delay, acceleration, design, unresolved change orders, overhead, and other damages in excess of $40 million against the owner. Parente Randolph’s forensic analysis, report, and expert witness testimony provided a basis for settlement of the claim at a significantly reduced amount.

Cost Certification

Parente Randolph was retained by counsel on behalf of a defendant Surety Company. The Surety had provided payment and performance bonds on behalf of a terminated demolition subcontractor in connection with the restoration of a Center City Philadelphia hotel. The “obligee” (general contractor) asserted it spent significant sums completing the demolition and abatement work. Our detailed analysis and cost certification of the asserted cost overruns and related damages were used as a basis for negotiating a successful settlement during the arbitration hearing.

Parente Randolph provided cost certification and forensic analysis to a surety related to a $120 million resort project located in Puerto Rico. Our analyses and findings provided a basis for disputing unresolved change order requests, delay claims, project overruns, and amounts in excess of the guaranteed maximum price.

Primary Insurance Claims and Subrogation Litigation

A Parente Randolph forensic professional was retained on behalf of several insurance carriers to analyze business interruptions, inventory losses, and restoration cost issues as a result of a strip mall fire. Our analysis assisted counsel in preparing document requests and information needed during mediation sessions. More than 100 tenant claims were ultimately settled.

Parente Randolph analyzed and summarized asserted damages in excess of $17 million associated with an asserted underinsured fire loss suffered by the owner of a Transportation Warehouse Facility. Our analyses and quantification of actual damages suffered was used as a basis for settlement negotiations and final resolution of the claim.

Surety

Parente Randolph forensic professionals were retained on behalf of a major surety to provide accounting and consulting services for an ENR top 400 construction company with annual sales in excess of $250 million. The contractor was terminated on numerous bonded projects. Our preliminary analyses were used as a basis to make completion decisions and resolution of approximately 30 projects. In addition, our periodic updates helped establish reserves and cash flow estimates as completion and recovery efforts continued.

We provided forensic analysis and performed cost certification on a recently completed NFL stadium for damages asserted by the Owner for anticipated costs and damages related to repair of defective work. Our analyses were used as a basis for determining reasonable costs incurred, identification of relevant construction records, and potential allocations of liability to various subcontractors.

Corporate/Special Fraud Investigation

An anonymous letter containing copies of checks and a W-9 tax form was delivered to the Chief Executive Officer’s (CEO) home address. The letter alleged that an accounting officer was misappropriating corporate funds. The author of the letter was concerned because they felt the targeted employee lacked segregation of duties in the sales and collection cycle. The checks were made payable to the employee and not to the corporation. It was alleged that the checks were discovered when the employee was on vacation. The CEO brought the letter to the attention of senior management, the Audit Committee, the Board of Directors and its Big 4 external auditors. The company’s quarterly filing to the SEC was due in 11 days; the Big 4 audit firm was not going to authorize the release of the financial statements until the exposure was quantified. In addition, the business was close to being acquired by a Fortune 50 company. The Audit Committee immediately called for a special investigation and Parente Randolph was retained. Parente Randolph analyzed the contents of the anonymous letter, outlined each allegation, and developed a detailed work plan for the investigation. Our forensic approach was discussed and approved by that both the Audit Committee and external auditors. Our work-plan was focused on two primary areas. The first area analyzed suspicious account receivables write-off history and the second area tested for the possible existence of additional checks with similar characteristics to the ones in the anonymous letter. Our process identified additional checks that matched the characteristics of those included with the anonymous letter. We also identified additional patients and new third party payers that had to be investigated. Our extensive analyses revealed no misappropriation and the allegations in the letter were false. The Big 4 audit firm reviewed Parente Randolph’s work product and the Company was able to timely submit its quarterly filing. Three weeks later the company was successfully sold to the Fortune 50 company.

Patent Damages Experts

The Parente Randolph patent damages expert was retained by counsel for the plaintiff/manufacturer of pest control devices. The retention occurred just before trial after the plaintiff’s original patent damages expert witness was precluded from testifying. The plaintiff’s motion to substitute a patent damage expert witnesses was denied by the trial judge due to the late nature of the request. Accordingly, a decision was made to utilize the plaintiff’s financial staff to present patent damages. The Parente Randolph expert quickly got up to speed; sorted through voluminous discovery data and information; provided summaries and calculations of lost profits and reasonable royalties; and worked with counsel and the plaintiff’s representatives to prepare for direct and cross examination testimony. The jury found for the plaintiff on liability and awarded millions in patent damages.

Professional Liability/Malpractice Suit

A national law firm was sued as a result of performing services related to the financing of several businesses attempting to be developed in Asia. The plaintiffs’ expert determined that the alleged damages were in excess of $500 million. Parente Randolph personnel assisted the law firm in the analyses of potential damages after carefully evaluating the economic and industry outlook, specific to where the businesses were to be developed. Based on the in-depth research and on-site interviews with local industry and regulatory representatives, the case was successfully settled before trial.

Shareholder Oppression

A minority shareholder was “squeezed out” of a service business that he founded by partners that he had brought into the company. The Parente Randolph professional team assisted the plaintiff and his legal counsel by providing pertinent evidence related to the various “freeze out” factors contributing to the liability issues, the calculation of loss of value damages, and the date of valuation. As a result, the court ordered a buy-out of the minority interest at a judicially-determined fair value.