Bar Association 2020 COVID Webinar Recap

What a year 2020 has been. Like so many companies, we at Vallit Advisors anticipated 2020 to be a banner year. The economy was steaming along, with unemployment rates being the lowest in decades and one of the biggest challenges most companies were facing was finding qualified employees to meet the demand of clients and customers. Then, COVID hit in March 2020. Social interaction as we knew it was turned upside down. Vallit Advisors, like so many companies, had to create new ways to interact with our clients and referral sources and share information about various topics using technologically advanced formats like Teams, Zoom, and Google Hangout. Employees started working from home, much to the trepidation of many employers. Businesses in the US and around the world were forced to utilize technology like never before to continue operations.

Once it became apparent that face-to-face interaction was at risk and most, if not all business lunches, happy hours, meet and greet outings and conferences were going to be canceled, the team at Vallit Advisors committed to provide a series of eight webinars with six local bar associations. A common theme of each of the webinars was how COVID had impacted business as usual, our economy and other topics of interest to the bar association membership. The participating bar associations included Baltimore County, Anne Arundel County, Baltimore City, Howard County, Montgomery County, and Prince Georges County. The following represents a summary of each of the webinars presented in 2020.

May 28, 2020 – COVID-19: Assessing the Impact on Real Estate Values

Tom Weigand, MAI, with Treffer Appraisal Group, discussed the impact COVID was having on real estate values in the Maryland and DC market. James P. Lighthizer, SIOR, CCIM, with Chesapeake Real Estate Group, LLC reviewed how COVID was impacting the commercial real estate market. Information was provided from the perspective of a tenant, landlord, developer and operator. James W. Constable, Esquire, with Wright, Constable & Skeen, LLP shared various legal issues COVID was generating in the real estate business sector. Mark W. Norris, CPA/ABV, ASA, CVA, MAFF with Vallit Advisors, LLC shared various aspects of valuing an entity that owns real estate. Discussion focused on discounts for lack of control and lack of marketability and how COVID could impact these discounts.

June 11, 2020 – Bankruptcy During COVID-19

The negative economic impact COVID has had on businesses is significant. Many companies have had no option but to go out of business and declare bankruptcy. Paul Sweeney, Managing Partner with Yumkas, Vidmar, Sweeney & Mulrenin discussed various options a business owner has when declaring bankruptcy, including filing for Chapter 7, Chapter 11, and Chapter 13. Carl Miceli, President of Miceli Appraisers & Liquidators, Inc. shared information on the impact COVID was having on machinery and equipment appraisals in various industries including restaurants, fitness centers, retail stores, liquor stores, auto industry, food processing, farming equipment, jewelry stores, aviation, medical/healthcare, cannabis, and construction. Zachary C. Reichenbach, CFA, CPA/ABV/CFF, a Director with Vallit Advisors reviewed how the approach to valuing businesses has been impacted by COVID along with issues that must be considered if a company is considering filing for or is in bankruptcy.

June 25, 2020 – So, the Quarantine Didn’t Make You & Your Spouse Closer?

For spouses who had difficulty living and being close to each prior to COVID, the implications of being quarantined together would appear to represent a volatile situation. Therefore, we thought a webinar on this topic was appropriate. The Honorable Diane O. Leasure (Retired) and Craig P. Ward, Esquire with Royston, Mueller, McLean & Reid, LLP shared numerous issues from a legal perspective on how COVID was impacting divorce matters. One of the many topics discussed included the Chief Judge’s Administrative Order dated May 22, 2020 that contained five phases. Kristopher R. Hallengren, CPA/ABV/CFF, ASA, MSF, a Managing Member with Vallit Advisors discussed how COVID was impacting various services he typically would provide in a marital matter including, but not limited to business valuations and household income analysis.

July 9, 2020 – The Perfect Storm: Why Now May Be the Best Time for Estate Planning

COVID has negatively impacted many industries, including, but not limited to travel, entertainment, retail shopping, dining, and healthcare. Many businesses that operate in these industries and businesses that sell goods and services to businesses in these industries have been negatively impacted financially. As a whole, the value of these businesses has generally decreased when looking at the overall effects of COVID to a variety of businesses. Such a decrease in value could represent an opportunity to conduct some estate planning. In addition, the possibility of the Democratic Presidential Nominee, Joe Biden (now President-Elect) winning the presidential election represents an additional incentive to seriously consider estate planning. Frederick R. Franke, Jr., Esquire, Managing Attorney of Franke Beckett, LLC and Lisa M. Whitcomb, Director of Wealth Strategy with Glenmede Private Wealth not only discussed numerous reasons why estate planning should be conducted, but reviewed various strategies. R. Christopher Rosenthal, CPA/ABV/CFF, ASA, AEP, Managing Member with Vallit Advisors discussed how COVID has impacted business values and the benefits associated with this and estate planning.

October 1, 2020 – Cyber Issues During COVID-19: Understanding the Legal Obligations, the Risks and How to Mitigate Them

COVID and the requirement for social distancing has required businesses to rely on technology more than ever. As a result, data security incidents are at an all-time high. Eric Fiterman, CTO with Cignal discussed various topics including data security, cybersecurity, and ransomware. Howard Feldman, Esquire, CIPP/US, a Partner with Whiteford, Taylor and Preston discussed the increasingly complex legal environment that cyber law represents at all levels. Mr. Feldman also touched on private lawsuits, government enforcement actions, contract enforcement actions and business, financial and reputational risks. A 10-step action plan was provided regarding compliance and mitigation. Mike Volk, Vice President, Cyber Risk Solutions with PSA reviewed issues related to cyber insurance. Topics included what typical policies cover and how cyber insurance supports incident response. Zachary C. Reichenbach, CFA, CPA/ABV/CFF, a Director with Vallit Advisors discussed what happens after a theft or misappropriation has occurred. Topics included determining what documents are needed to assess the economic damage incurred, identifying what assets have been negatively impacted, examples of misappropriation and the need to bring in experts such as forensic accountants and cybersecurity specialists.

October 15, 2020 – Breach of Contract and Damages During the Indefinite Pandemic

COVID has produced significant economic stress on our economy which, in turn, has negatively impacted many businesses. Many companies have experienced a reduction in operations, and some have ceased operations all together. As a result, the ability for many companies to fulfill obligations required in contracts has been jeopardized. Consequently, many contracts have been breached, with economic damages being incurred by the parties involved. Lane Hornfeck, Esquire, Litigation Shareholder with Shulman Rogers, and Vice President of the Commercial Litigation Department discussed two types of damages as a result of a breach of contract: compensatory and punitive. Ms. Hornfeck also discussed breach of contract defenses including impossibility, impracticability, and frustration of purpose. R. Christopher Rosenthal, CPA/ABV/CFF, ASA, AEP, Managing Member with Vallit Advisors discussed the differences between lost value and lost profits because of a breach of contract. Mr. Rosenthal also reviewed various methodologies to calculate lost profits and lost business value. In addition, he discussed causation issues as it relates to the wrongful act and damages.

October 29, 2020 – The New Business Normal: Working Remotely and the Legal and Control Issues You Need to Know About

COVID and the requirement for social distancing has required businesses to rely on technology more than ever as much of the workforce has been required to work remotely. Working remotely has various issues that businesses have not had to deal with before. Russell B. Berger, Esquire, Labor and Employment Principal and Department Chair with Offit Kurman discussed key stats on employee fraud, COVID-19 legal issues, remote work policies and legal risks of remote work. Zachary C. Reichenbach, CFA, CPA/ABV/CFF, a Director with Vallit Advisors discussed internal control issues related to working remotely. In addition, Mr. Reichenbach discussed theft of cash and misappropriation of various assets, and the related damages incurred.

December 3, 2020 – Considerations of Tax and Valuation Issues in 2021

Our last webinar took a break from issues related to COVID and focused on a tax update, potential tax issues related to estate and gift taxes under a Biden administration tax plan, and business valuation issues impacted by these changes. Mary-Kay Leary, CPA, MST, Partner with Fitzpatrick, Leary & Szarko, LLC reviewed Paycheck Protection Loans (“PPP”) and related forgiveness. In addition, Ms. Leary reviewed various aspects of the Cares Act and related planning tips. Finally, she reviewed what may be on the horizon in a Biden administration tax plan. James A. List, Esquire, Owner of James A. List, LLC focused on estate and gift tax planning issues. After a brief review of the history of estate exemptions and estate tax rates, Mr. List provided some insight on the impact a Biden Administration tax plan would have on the taxation of estates. Several planning strategies were also discussed. Zachary C. Reichenbach, CFA, CPA/ABV/CFF, a Director with Vallit Advisors provided an example of how an increase in income tax rates would negatively impact the value of a business. Mr. Reichenbach also reviewed additional issues valuation analysts have had to consider when valuing businesses because of COVID.

It was a pleasure and an honor for the team at Vallit Advisors to be able to work with the six bar associations and all the presenters in providing the above webinars. For additional information on any of the above webinars, feel free to contact either Mark Norris, mnorris@vallitadvisors.com (443-482-9500, ext. 102) or Zach Reichenbach, zreichenbach@vallitadvisors.com (443-482-9500, ext. 111).