Memorandum
To: Benjamin
R. Arnold, Esquire
From: David J.
Shuffler
Subject: Work
Product Memorandum re: Albert S. Crown, D.M.D., P.C.
Valuation
Report
Rendered by I.W. Expert, LLC
Date: December 9, 2010X
In accordance with your request on January 16, 200X,
I have reviewed the Albert S. Crown, D.M.D., P.C., Valuation of Practice
rendered by I.W. Expert, LLC (Adversary Expert), West Beltway, Anytown, USA, as
well as the appraisal methods and techniques that Adversary Expert used to
determine the fair market value of the tangible assets and patient records of Albert
S. Crown, D.M.D., P.C. (Subject Practice) The effective date is December 31, 200Y. The date of the report is September 19, 200X.
My review of the Adversary Expert has been conducted
in conformity with Standard 3 of the Uniform Standards of Professional
Appraisal Practice of The Appraisal Foundation (USPAP), Rule 3-1 and Rule 3-2.
Standard 3 states that:
“In reviewing an appraisal
and reporting the results of that review, a review appraiser must form an
opinion regarding the adequacy and appropriateness of the report that is being
reviewed and comment on the content and conclusions of the report.”
Standards Rule 3-1 states that a review appraiser
must:
“Form an opinion regarding
the completeness of the report under review in light of the requirements
contained in these standards; form an opinion regarding the adequacy and
relevance of the data and the propriety of any adjustments to the data; form an
opinion regarding the appropriateness of the appraisal methods and techniques
that were used; form an opinion as to whether the analysis, opinions and
conclusions contained in the report are appropriate and reasonable.”
I have given careful consideration to USPAP Standard
3, Rule 3-1 and Rule 3-2, as well as USPAP Competency Provision, which requires
an appraiser to have the knowledge and experience to define and execute the
valuation assignment competently; USPAP Ethics Provision, which requires an
appraiser to perform assignments with impartiality, objectivity and
independence; USPAP Standard 9, which is the requirement for developing a
business or intangible asset appraisal, and Rule 9-1, Rule 9-4, Rule 9-5; USPAP
Standard 10, which is the requirement for reporting the results of a business
or intangible asset appraisal, and Rule 10-1, Rule 10-2, Rule 10-3 and, it is
my opinion, that the SM Report does not conform to the USPAP Competency
Provision, USPAP Ethics Provision, USPAP Standard 9 or Standard 10.
Benjamin R. Arnold, Esquire
March 27, 200X
Page 2
EFFECTIVE
DATE
There are two significant dates in an appraisal
report: the effective date or date of valuation and
the date of the report. The effective
date is the cut-off date for data gathering and establishes the context of the
valuation conclusion. The date of the
report is the date the report was written and indicates the appraiser’s
perspective of dentistry as well as the Practice.
Although there is no absolute rule for determining the
effective date for the purpose of equitable distribution of marital assets,
unless there are compelling equitable considerations, the effective date is the
filing date of the divorce complaint.
Appraiser acknowledges the
effective date is the filing date of the divorce complaint, “When valuing an
asset for a divorce, it is customary to use the date of the marital complaint
as the appraisal date. The marital
complaint date in this action was May 24, 200X.”
Although Adversary Expert recognizes that “it is
customary to use the date of the marital complaint as the appraisal date,” they
did not use the date of complaint because it is not in the best interest of
their client. Rather, Appraiser used an
effective date of December 31, 200Y, which is the fiscal date preceding the
date of complaint.
Adversary Expert state:
“…We were informed…that Doctor
Crown was hospitalized for a good portion of the early months of 2009 and
sub-contracted other dentists to see his patients.
“…Since Doctor Crown was an
absentee owner during most of the early months of 2009, using financial data
for that period would not be indicative of the value of the practice with Doctor
Crown there full time.”
Adversary Expert deliberately chose the December 31, 200Y
effective date because it enabled them to artificially inflate the value of
Practice.
Adversary Expert perspective of the Practice was
framed four months and twenty six days prior to the date of complaint. This enabled them to ignore the
hospitalization of Doctor Crown and the adverse impact his illness would have
on production, total income collected, adjusted net cash flow, and the value of
Practice. The effective date was
convenient. It was not correct.
In his book, Valuing
Small Businesses and Professional Practices,
Shannon P. Pratt, D.B.A., F.A.S.A., C.F.A., discusses the impact of changing
circumstances on the effective date and the valuation conclusion:
“…the date…the business or
practice is being valued is critically important, because changing
circumstances can cause values to vary dramatically from one date to another,
and the valuation date directly influences data available for valuation.”
Benjamin R. Arnold, Esquire
March 27, 200X
Page 3
Appraiser is not a matrimonial attorney. It is audacious of him to presume that the
hospitalization of Doctor Crown is a compelling equitable consideration or
change in circumstance which calls for an effective date of December 31, 200Y. There are no compelling equitable
considerations in this case; the effective date is May 24, 200X.
Appraiser did not render appraisal services in a
prudent manner. The context of the SM
Report as well as the perspective of Appraiser is wrong and, as a result, the analysis,
opinions and conclusions of Adversary Expert are meaningless.
STANDARD
OF VALUE
In their book, Valuing
a Business: The Analysis and Appraisal of Closely Held Companies, Shannon
P. Pratt, D.B.A., C.F.A., F.A.S.A., Robert F. Reilly, C.P.A., C.F.A., A.S.A.,
and Robert P. Schweihs, A.S.A., state:
“…The word value means
different things in different contexts…without carefully defining the term
value, the conclusion reached in the valuation report has no meaning.
One of the professional
appraiser’s most important tasks is to…arrive at a definition of value that is
appropriate to the specific purpose of the valuation engagement.
In many situations, the
standard of value is legally mandated…The standard of value. . addresses what
valuation methods are appropriate and what factors should or should not be
considered.”
In the case of equitable distribution, the parameters
of the valuation problem are defined according to statutes, regulations and
administrative rulings as well as case precedent and court directives and
preferences.
Lavene v.
Lavene,
162 N.J. Super 187, 192 (Ch. Div. 1978), on remand from 148 N.J. Super 267
(App. Div. 1977), established fair market value as the standard of value for
the equitable distribution of marital assets.
The Levene Court held that:
“…approach, methods and
factors set forth in the revenue ruling for the valuation of closely held
corporate stocks for estate and gift tax purposes were applicable in instant
case to determine valuation of stock owned by husband.
…Valuation of stock of a
closely held corporation calls for an attempt to fix a “fair market value” for
stock, that is, price at which property would change hands between a willing buyer
and a willing seller…”
Other courts affirmed Lavene. Fair market value has
become the standard of value for the equitable distribution of marital assets.
Benjamin R. Arnold, Esquire
March 27, 200X
Page 4
Although Adversary Expert state that “the purpose of
this appraisal is to establish a fair market value for the practice to be used
for the equitable distribution assets in the dissolution of the marriage of Doctor
and Mrs. Crown,” they did not use the fair market standard. They used a standard which Lewis A. Barney, Esquire,
calls value to holder or equitable distribution value.
Adversary Expert state:
“…this practice is being
valued for a divorce. Therefore, there
is no sale being contemplated, Doctor Crown will not be leaving the practice
and the financial information should reflect Doctor Crown’s presence…”
It is the responsibility of Adversary Expert to
implement the standard of value that was established in Levene and render a
credible valuation conclusion. It is not
their responsibility to interpret the law and issue an opinion regarding which standard
of value is appropriate in this matter.
The purpose of this appraisal is to determine the
value of Practice for the purpose of equitable distribution. Case precedent indicates that the standard of
value is fair market value not investment value or fair value or value to the
holder or equitable distribution value.
Since the concept of fair market value presumes a
transfer of ownership and a change of doctors, the value of Practice indicates
the likelihood patients of record will continue to purchase dental services
from the practice once it is sold and, therefore, it reflects the amount of
professional goodwill that can be transferred from Doctor Crown to another
dentist as of the effective date.
Doctor Crown is a sole practitioner. His illness and hospitalization compromise
patient service capacity and adversely impacts the likelihood of retaining
business from existing patients. This
increases the transfer risk and diminishes the value of professional goodwill.
Adversary Expert did not use the fair market standard
because it is not in the best interest of their client. They used the value to holder standard in
order to nullify the transfer risk and eliminate the potential erosion in
professional goodwill.
APPROACH
TO VALUATION
USPAP Standards Rule 9-4 and Revenue Ruling 59-60,
I.R.B. 1959-9 as well as the Internal Revenue Service Exempt Organizations Continuing Professional Education Technical
Instruction Program, direct an appraiser to analyze the nature of the
business of the subject practice and its financial history as well as the
economic climate for the health-care industry and the dental profession in
particular.
Industry-specific factors, such as health-care
reform, managed care, health-care regulation, and Medicare and Medicaid reform
impact doctor-productivity.
Practice-specific factors, such as the clinical focus, service mix, payer
profile, referral patterns, length of stay, accounts receivable, expense
management, et cetera, impact patient-service charges, total income collected,
professional compensation, and the adjusted net cash flow of the subject
practice.
An analysis of the inter-relationship of these external and internal factors will enable an appraiser
Benjamin R. Arnold, Esquire
March 27, 200X
Page 5
to stipulate the
forecast assumptions of the valuation model and select the gross revenue
multiplier, discount rate or capitalization rate that he/she will use to
determine the fair market value of the tangible assets and professional
goodwill of the subject practice.
Adversary
Expert did not take a case history of Practice or give it a physical
examination. They did not track the aforementioned practice-specific factors or
conduct a comparative analysis of doctor productivity, practice overhead
expenses, and accounts receivable management and, as a result, discovery is
weak.
Appraiser did not gather the requisite data that
would enable him to stipulate the forecast assumptions of the valuation model
or opine on the gross revenue multiplier that he would use to determine the
value of Practice.
The SM Report does not conform to USPAP Standards
Rule 9-4 or Revenue Ruling 59-60, I.R.B. 1959-9 or the Internal Revenue Service
Exempt Organizations Continuing
Professional Education Technical Instruction Program or the American
Society of Appraisers BVS-VI that requires that an appraiser collect and
analyze all the data that is required to reach a fitting valuation conclusion,
or ASA BVS-V, which requires an appraiser to document all information that he
relied on in order to reach a valuation conclusion.
The SM Report is not fact specific and, as a result,
it is misleading.
METHOD OF
APPRAISAL
USPAP Standards Rule 9-4 (a) direct an appraiser to
“consider all appropriate valuation methods and procedures” in order to render
a credible business or intangible asset appraisal. Although Rule 9-4 (a) requires that an
appraiser consider each relevant valuation approach, Rule 9-5 (a) compels an
appraiser to use a valuation approach that is applicable to the specific
valuation assignment.
Adversary Expert used four methods of appraisal to
determine the fair market value of the tangible assets and professional
goodwill of Practice: Cost Approach
(Net Worth Method), Market Approach--Sales Price to Gross (Gross Revenue
Multiplier Method), Market Approach--Sales Price to Earnings (Gross Revenue
Multiplier Method), and Owner’s Discretionary Cash Flow (Multiple of
Discretionary Earnings Method).
Cost Approach
The focus of the cost approach is the value of the
assets of a professional practice not it’s earning capacity and, as a result,
it disregards professional goodwill. The
net worth method assumes that the value of Practice is the adjusted fair market
value of its tangible assets including accounts receivable minus the adjusted
fair market value of its liabilities.
Benjamin R. Arnold, Esquire
March 27, 200X
Page 6
According to Adversary Expert:
“This approach is generally
not applicable to service businesses and going concerns. Additionally, it does
not value intangibles such as goodwill.
Applicability of this approach is for businesses being appraised…in a
liquidation situation.”
Jay E. Fishman, M.B.A., A.S.A., C.B.A., Shannon P. Pratt, D.B.A., F.A.S.A., C.F.A.,
J. Clifford Griffith, M.P.A., C.P.A., and D. Keith Wilson, C.P.A., concur. In their book, Guide to Business Valuations, Volume 1, Messrs. Fishman, Pratt,
Griffith and Wilson state:
“…asset methods focus on
the value of a company’s assets…instead of its earnings potential.”
Thus, the NAV method is generally used in one of the
following situations:
A.
The company’s value depends on the value of its tangible
assets and there is little or no value added to its. . .services from labor or
intangible assets.
B.
The company has no established earnings history. . .or a
questionable ability to continue as a going concern.
The cost approach or net asset method is not applicable
in this case. Appraiser should not have
used it.
Market Approach
- Sales Price to Gross
The market approach--sales price to gross method,
which is a gross revenue multiplier, assumes that the fair market value of the
subject practice can be determined by the ratio of the sale price to gross
revenue of a guideline practice.
However, since few, if any, dental practices are comparable, the gross
revenue multiplier method is simplistic and has severe limitations.
Shannon P. Pratt, D.B.A., C.F.A., C.F.P., A.S.A.,
C.R.A., in his book Valuing Small
Businesses and Professional Practices,
states:
“…One of the most widely
used and abused approaches to the valuation of small business and professional
practices is the gross revenue multiplier method. It can be useful, but its usefulness has
severe limitations. When gross revenue
multipliers are used for valuation the result can be an extremely misleading
estimate of value.”
The gross revenue multiplier method is a rule of
thumb and according to Pratt:
“…a rule of thumb is a
homemade recipe for making a guess. It
is an easy-to-remember guide that falls somewhere between a mathematical
formula and a shot in the dark. Rules of
thumb are dumb. . .greatly oversimplified. . .highly unreliable. They are dangerous and full of pitfalls. Simplicity is often achieved at the
considerable loss of realism.”
In The Guide to
Business Valuations, Volume 2: sixth edition (March 1996), Shannon P.
Pratt, et. al., state:
Benjamin R. Arnold, Esquire
March 27, 200X
Page 7
“…The biggest challenges in
using comparative company methods is to identify comparative companies for
which sufficient information is available, to adequately analyze the
similarities and differences between the comparative companies and the company
being valued, and to reflect these similarities and differences in the
resulting value multiples. The business
valuation consultant will rarely find a comparative company that is exactly the
same as the company being valued.”
Adversary Expert obtained information regarding
guideline practices bought and sold from a study titled Business Appraising in the Real World-Evidence from the IBA Market Data
Base published by The Institute of Business Appraisers, Inc.
According to Adversary Expert:
“…We examined the sales of
the practices with reported gross income in the same range as Doctor Crown’s practice
that is with gross income between $500,000 and $695,000. The ratio of average sales price to average
annual sales is .63 and the average sales price to earnings ratio is 2.76.”
It is not likely that the subject practice is
comparable with the guideline practices in the IBA data base and, since the Market Comparison Data published by The
Institute of Business Appraisers, Inc., is not practice specific, it is also
not likely that the IBA study contains enough information to enable Adversary
Expert to analyze the similarities and differences between Practice and the
guideline practices and to reflect these similarities and differences in the
resulting value multiple.
The Institute of Business Appraisers, Inc., states:
“…The information below is
supplied in response to your request for data to be used in applying the
“Market Data Approach” to business appraisal…we are not able to guarantee its
accuracy. Neither do we make any
representation as to the applicability of the information to any specific
appraisal situation.
The Practice is a general
practice with practice-specific risk factors that other dental practices in the
IBA data base may not possess. The
doctor established the practice in 1983 and he has practiced at the current
location for 20 years. Preventive and
diagnostics account for 60% of services rendered; operative 20%; periodontal
15%; endodontic 3%; and general services 2%. Eighty percent of the dentistry
the doctor performs is well care. Doctor
Crown is not a member of any managed-care panels.
The Institute of Business
Appraisers, Inc., Market Comparison Data
includes twenty three general dental practices with annual gross revenue
between $500,000 and $695,000; twenty three practices reported the ratio of
average sales price to gross; thirteen practices reported average sales price
to earnings.
New York accounted for 4% of the general dentists in the data base; California
Benjamin R. Arnold, Esquire
March 27, 200X
Page 8
and Pennsylvania 30% each;
Southwest 13%; Northeast 9%; Mid-west, Texas, and Northwest accounted for the
balance, 14%. Thirteen practice sales
occurred prior to the effective date; three occurring during 2002; one sale
occurred after the effective date.
Adversary Expert failed the
guideline test and, as a result, their valuation conclusion is speculative and
without merit.
Appraiser used a weighted
average to determine the reported annual sales volume of Practice and stated
that “gross receipts include non-deposited cash receipts.”
The use of a weighted
average neutralizes the historical trend in operations and negates the impact
of industry-specific and practice-specific factors on the selection of a gross
revenue multiplier.
A weighted average does not
conform to Section 4.02 (d) or Section 7 of Revenue Ruling 59-60, I.R.B. and is
misleading.”
Section 4.02 (d) states that:
“…Potential future income
is a major factor in many valuations of closely-held stocks and all information
concerning past income which will be helpful in predicting the future should be
secured. Prior earnings records usually are the most reliable guide to future
expectancy, but resort to arbitrary five- or ten-year averages without regard
to current trends or future prospects will not produce a realistic valuation.”
Section 7 states that:
“. . .there is no means
whereby the various applicable factors in a particular case can be assigned
mathematical weights in deriving the fair market value. For this reason, no useful purpose is served
by taking an average of several factors . . .and basing the valuation on the
result. Such a process excludes active
consideration of other pertinent factors, and the end result cannot be
supported by a realistic application of the significant facts in the case
except by mere chance.”
The allegation of unreported income raises two
points: relevance and propriety. If the allegation is true, the impact of
$35,000 of non-reported deposits on the valuation conclusion is minimal. If the allegation is not true, it is inflammatory
and not appropriate.
The market approach - sales price to gross method may
appear to be simple, but it is difficult to apply to a complex business such as
a dental practice. It is very mechanical
and, as a result, does not produce a credible valuation conclusion. Adversary Expert used this method to nullify
the excessive practice overhead expenses and inflate the value of Practice.
Benjamin R. Arnold, Esquire
March 27, 200X
Page 9
Market Approach - Sales Price to Earnings
The market approach - sales price to earnings method
assumes that the fair market value of the subject practice can be determined by
the ratio of the sales price to earnings of a guideline practice. The market approach - sales price to earnings
method is also a gross revenue multiplier.
Adversary Expert state:
“…Before applying the Sales
Price to Earnings ratio of 2.76, income as reported must be normalized…adjustments
are made to the reported…operations reflecting the true profit of the
practice. Any deducted expenses that
were personal and/or not ordinary or necessary to the operations of a dental
practice are added back.”
The Internal Revenue Service Exempt Organizations Continuing Professional Education Technical
Instruction Program sets forth valuation guidelines for tax-exempt
institutions such as hospitals who want to acquire private medical practices:
“…The first step is to
develop financial statements for the estimation period…the historical information should be adjusted or
“normalized” for any extraordinary occurrences...or for known changes in
revenues or expenses which will be sustained into the future.”
The IRS requires that an appraiser use reasonable
forecast assumptions:
“…After the normalized
financial statements are developed, reasonable assumptions are made
regarding rates of…expense increase based upon current market conditions,
growth, and best estimates of inflation trends…in all cases, reasonable
assumptions…should be employed.”
The SM Report adjustments to normalize net income are
neither correct nor complete.
Appraiser made adjustments to the following revenue
and expense centers for the twelve months ended December 31, 200Y: Non-deposited Receipts, Officers
Compensation, Corporate Perquisites, Salaries, and Interest.
Appraiser did not account for likely adjustments to
the following expense centers: Rent, Telephone, General Expense, Gifts,
Office Supplies, Postage, Uniform Expense, Repairs and Maintenance, Outside
Services, and Education.
Appraiser failed the Internal Revenue Service Exempt Organizations Continuing Professional Education Technical Instruction
Program reasonable assumption
test.
Owner’s Discretionary Cash Flow
The multiple of discretionary earnings method is a
valuation approach that is commonly used by the business brokerage community.
According to the American Society of Appraisers Principles of Valuation Student Manual:
Benjamin R. Arnold, Esquire
March 27, 200X
Page 10
“…It is designed to render
a “quick and dirty” indication of the amount a buyer, who would make the
ownership and operation of the business his/her means of livelihood, might be
able to afford to pay for the business.
It involves the use of “discretionary
cash” multiples that may or may not adequately reflect how the market would
perceive an investment in the business being subjected to appraisal.”
In The Guide to
Business Valuations, Volume 2: sixth edition (March 1996), Shannon P.
Pratt, et. al., state:
“…The multiple of
discretionary earnings method is often used to value very small businesses
(normally with…values of less than $250,000).
…this method has been
misnamed, misused, and misunderstood by appraisers and brokers more so than any
other valuation method. Many valuation
consultants do not use this method because of the difficulty involved in
supporting the required multiples.”
Because the rate of return required by owner/managers
co-mingles return on labor (managers’ compensation) and return on capital
(distributions and appreciation), application of this method may not produce an
indication of fair market value.
According to Adversary Expert, when an appraiser
“chooses a multiple to apply to owner’s discretionary cash flow, consideration
of the risks associated with owning this dental practice must be
considered.”
Adversary Expert depiction of the aforementioned
industry-specific and practice-specific factors is nebulous.
Adversary Expert did not take a case history of
Practice or give it a physical examination.
Appraiser did not analyze how health-care reform together with
practice-specific factors such as the clinical focus, service mix, payer
profile, and referral patterns impact doctor-productivity or conduct a
comparative analysis of practice overhead expenses and accounts receivable
management to determine the reliability and continuity of future earnings.
Adversary Expert used the multiple of discretionary
earnings model to corroborate the price-to-gross value and the price-to-net
value, but, since they failed the seller’s discretionary cash flow multiplier
test, they are unable to stipulate the risk assumptions in the owner’s
discretionary cash flow model and opine on the discretionary cash flow
multiplier.
The seller’s discretionary cash flow method is
simplistic and unreliable. Although it
is commonly used by the brokerage community, it should never be used to
determine the value of a professional practice for the purpose of equitable
distribution of marital assets.
Benjamin R. Arnold, Esquire
March 27, 200X
Page 11
ACCOUNTS
RECEIVABLE
The accounts receivable of a dental practice are fees
for patient-service activities that have been billed but not collected. In order to ascribe a value to said
receivables, an appraiser must first verify the amount of accounts receivable
that are eligible for collection and, then, age the outstanding balance and
determine its present value.
Adversary Expertr did not follow the aforementioned
method of appraisal; they simply recorded the unadjusted fees for
patient-service activities as of November 9, 2008, and incorporated said amount
into their valuation conclusion.
Adversary Expert state:
“A ‘Practice Analysis’
sheet was completed on November 9, 200Y. This data included a value for
accounts receivable of $73,000. Doctor Crown
did not know who completed the sheet, however, other data on the sheet was
consistent with the practice records and we have therefore utilized the
information in our report.”
The technique of Appraiser is arbitrary and improper
as well as negligent.
The SM Report does not conform to USPAP Standard Rule
9-1 (b) which requires an appraiser use diligence and care.
“…In performing appraisal
services, an appraiser must be certain that the gathering of factual
information is conducted in a manner that is sufficiently diligent ...further,
an appraiser must use sufficient care in analyzing such data to avoid errors
that would significantly affect his/her opinion and conclusion.”
CONCLUSION
USPAP Competency Provision
requires “an appraiser to have both the knowledge and experience required to
perform a specific appraisal service competently.”
USPAP Standards Rule 9-1
(a) requires that an appraiser must “be aware of, understand, and
correctly employ those
recognized methods and procedures that are necessary to produce a credible
appraisal.” Rule 9-1 (b) states that an
appraiser must “not commit a substantial error of omission or commission that
would significantly affect an appraisal.”
Rule 9-1 (c), which requires an appraiser be diligent and not render appraisal
services in a careless or negligent manner, states:
“…The fact that the
carelessness or negligence of an appraiser has not caused an error that
significantly affects his or her opinions or conclusions and thereby seriously
harms a client does not excuse such carelessness or negligence.”
USPAP Standard 10 requires
that “an appraiser communicate each analysis, opinion, and conclusion in a
manner that is not misleading.”
Benjamin R. Arnold, Esquire
March 27, 200X
Page 12
Adversary Expert did commit a series of errors of
omission and commission and, although each individual error may not have a
material impact on the valuation conclusion, the
sum of all the errors does
have a material impact.
The SM Report is
misleading: the effective date is not correct; the standard of value does not
conform to case precedent;
the approach to valuation does not conform to Revenue Ruling 59-60, I.R.B.
1959-9, ASA BVS-VI, BVS-V, USPAP Standards Rule 9-4, and the IRS Exempt Organizations Continuing Professional
Education Technical Instruction Program; the appraisal methods and
techniques are not relevant; the adjustments to the financial statements are
not accurate or complete; the appraisal criteria are erroneous; and the analysis
and opinions contained in the report are vacuous.
Adversary Expert did not
render appraisal services in a prudent manner.
The SM Report does conform to the USPAP Competency Provision, USPAP
Standard 9, Rule 9-1 (a) (b) (c), USPAP Standard 10 or the USPAP Ethics
Provision which states:
“…An appraiser who could
reasonably be perceived to act as a disinterested third party in rendering an
unbiased appraisal, review, or consulting service must perform assignments with
impartiality, objectivity and independence without accommodation of personal
interests.”
Appraiser distorted the
value of tangible assets and professional goodwill of Practice; his valuation
conclusion is meaningless.
I hereby certify, to the
best of my knowledge and belief, that the statements of fact contained in this
memorandum are true and correct, and this memorandum has been prepared in
conformity with the Uniform Standards of Professional Appraisal Practice of The
Appraisal Foundation and the Principles of Appraisal Practice and Code of
Ethics of the American Society of Appraisers.