Wall Street Valuation Methods Are Often Inadequate When It Comes to Securities Litigation, Says Marks Paneth & Shron Litigation and Corporate Financial Advisory Services Director

Wall Street Methods Are Often Biased Towards Transactional Value, Overly Simplistic and Do Not Reflect the True Operational Realities of a Business, Says Donald M. May in Recent Article Published in Securities Litigation Report

NEW YORK , NY--(Marketwire - July 21, 2010) -  Donald M. May, Ph.D, a Director in the Litigation and Corporate Financial Advisory Services Group at Marks Paneth & Shron LLP, has published an article in the Securities Litigation Report that urges private equity investors, litigators and courts to consider using accounting techniques, rather than the formulas typically based on Wall Street criteria, to arrive at valuations when making decisions about portfolio companies and arriving at determinations of damages. 

According to Dr. May, accounting approaches are more strongly suited to reveal the true financial realities of a business, as they examine aspects such as -- projected cash flows, sales growth, cost containment, working capital management and capital structure. 

In the article, Dr. May explains in detail:

  • Why Wall Street methods are often inaccurate
  • An alternative model -- Discounted Cash Flow (DCF) -- and its advantages
  • Instances when the DCF model should be used in litigation
  • Daubert standards and what they mean for DCF analysis

The full text of Dr. May's article can be found in the Marks Paneth & Shron Library.

To speak with Dr. May about valuation methodologies, please contact Itay Engelman of Sommerfield Communications at 212.255.8386 or via email at itay@sommerfield.com.

About Marks Paneth & Shron

Marks Paneth & Shron LLP is an accounting firm with nearly 475 people, of whom 64 are partners and principals. The firm provides businesses with a full range of auditing, accounting, tax, bankruptcy and restructuring services as well as litigation and corporate financial advisory services to domestic and international clients. The firm also specializes in providing tax advisory and consulting for high-net-worth individuals and their families, as well as a wide range of services for international, real estate, media, entertainment, nonprofit, professional and financial services and energy clients. Visit www.markspaneth.com for more information.

About Dr. Donald M. May

Donald M. May, Ph.D., is a valuation specialist with nearly twenty years of experience in industry, academia and public accounting and deep expertise in litigation and strategic consulting. Earlier in his career, Dr. May was an Assistant Professor in the Sloan School of Management at the Massachusetts Institute of Technology where he published research and taught MBA and Ph.D. level classes in economics, accounting, financial statement analysis and statistics.

Contact Information:

Itay Engelman
Sommerfield Communications, Inc.