When accounting goes unaccounted for
A little over a month ago BDO USA began layoffs in audit and, as we predicted at that time, a fresh batch has hit tax now that 10/15 is behind us. According to multiple tipsters, tax layoffs started today. We don’t have numbers at this time.
Fishbowl:
Earlier:
Anyone affected or otherwise in the know is welcome to reach out with details. Consolation and sympathy available upon request.
It’s not entirely clear why Jonathon P. Reuben’s services are no longer needed but you could easily conclude that the GCO wasn’t appreciated.
On June 20, 2011, the Audit Committee of the Board of Directors of Glen Rose Petroleum Corporation (the “Company”) approved the termination of services of Jonathon P. Reuben CPA, An Accountancy Corporation (“JPR”), effective immediately.
JPR was the independent registered public accounting firm for the Company for the fiscal years ended March 31, 2010 and 2009. The reports of JPR on the Company’s financial statements for the years ended March 31, 2010 and 2009 did not contain an adverse opinion or disclaimer of opinion, and such reports were not qualified or modified as to uncertainty, audit scope, or accounting principle, except that the reports of JPR on the Company’s consolidated financial statements as of and for the years ended March 31, 2010 and 2009 contained an explanatory paragraph which noted that there was substantial doubt as to the Company’s ability to continue as a going concern due to a deficit in working capital and incurring significant losses.
BDO will take it from here. Perhaps a nice welcome to the partnership gift for one of the newbies?
8-K [SEC via Citybizlist]
Oh look, we have more new partner news. BDO actually made this announcement a few […]
The Little Dipper of accounting firms, BDO USA, announced today that its FY 2020 revenue […]
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Truth 1: Leadership was close to another deal prior to the ESOP deal but had to do the ESOP deal when the other deal fell through at the last second. The interest rate on the loan for the ESOP deal is sucking this firm dry.
Truth 2: A partner who sold in the ESOP deal told me that his equity was worth $100 per unit, for example, prior to the deal and he sold $40 of it. Leadership told the partners that they could earn the $40 back in value appreciation on the retained $60 in 3 years. At the end of 3 years, his $60 per unit was worth less than $62 per unit. Leadership either lied or was just that stupid.
Unfortunately, this is kind of frightening since BDO was prolific on the M&A. A partner who believed in 3 years that the ESOP stock would be worth more than at the transaction date had to have been shown that the ESOP debt would be paid off. Is that possible? This is how all the PE deals are structured with massive debt structures in place where no debt existed before. The non-ESOP firms are being sold the same bill of goods. I guess the firms will all be going public like CBIZ.
Let’s go public BDO! LOL.. probably wouldn’t be the best option but fuk it.. Why not? If bdo goes public, maybe we’ll be acquired down the rest of road and it’ll pay off!? Haha.. I have a better chance of winning the lottery.
The value of the ESOP stock is not a 1-for-1 relationship with the debt. Company performance, which debt is paid down as expected (life is far more than 3 years), is the primary driver of the stock valuation.
If you’re looking for ammunition for concern, I would look to revenue growth. Are they growing as fast as expected when the ESOP began? No.
Wait, so are you not allowed to take an EBITDA addback for potential billable dollars in under-utilized staff? Weird.
I, for one, am shocked. I am utterly shocked at this announcement. Shocked, I tell you. I just can’t imagine how many Benjamins Mr. Berson used to wipe the tears from his face upon hearing this news.
Gotta feel good to get laid off a week before your company completes a $300M acquisition.
It’s all about optics.
Wait BDO is suing you guys?
From what I’ve seen the esop wasn’t really a true esop deal. BDO took out a shit load of debt with really high interest rate and are now struggling. ESOP can work but you can’t straddle the company with this much debt at such a high rate and expect things to go well. Clients are gonna start paying more because the company borrowed all that money.
sounds like a typical esop deal to me. the problem with their structure is they can’t pay the debt down fast enough to increase the diminished stock value after the debt was placed on the firm. i still wonder what kind of projections were shown to the partners that showed how the firm would perform to increase the value of the stock that given out.
Will BDO send you a strongly worded letter for reporting this?
Related to the esop the non big wigs aka “regular” partners were sold a false bill of goods. We were told a bunch of stuff was “easily achievable”and we were pretty much lied to on metrics that could be achieved.