Let’s Speculate Wildly About Why All the BDO USA Partners Are Getting Together for a Secret Meeting in Florida (UPDATE)

Ed. note: A tipster contacted us to give details on the meeting, update below. If you are a BDO partner in the know and would like to provide info please know that all sources are anonymous (we’re told the firm said to partners they’re tracking their phones, yikes). The tip line number appears below and rings through directly to me. Update 8/12/23: Late Friday Financial Times confirmed what we reported in Update #1 below regarding the ESOP and private equity, the names and numbers reported by FT are the same as what we were told. Update #2 was obviously a joke, though some guy did leave me a voicemail saying our reporting was all wrong and that RSM leadership would be meeting with BDO partners and Apollo, maybe I should upload it. We’ve added payout numbers as they were told to us by a source below.

The BDO bowl at Fishbowl is abuzz over a discovery that partners — apparently all of them — have suddenly booked travel to Orlando next week and no one there seems to know what for. Thanks to a tipster for providing screenshots as plebs like us are not authorized to view the bowl.

Text:

An in person all partner meeting with < a week of notice to book flights … let the wild speculation begin! But hold up, let me pop my popcorn first.

As predicted by BDO 1, there was in fact a bit of bellyaching. The firm has been closely clutching the purse strings since June when all non-billable travel was suspended.

If it guides your wild speculation any, apparently whatever it is is good news according to at least two people. It’s sounding a lot like a sale what with the freeze on non-essential travel and now this. BDO switching from a partnership to a corporation on July 1 might also bear some relevance to whatever’s going on here. Private equity taking a stake, perhaps? We know of one PE firm in particular that might be looking for a deal with an accounting firm after their last deal fell apart in the 11th hour (allegedly).

Let the speculation commence. We’ll let you know if we hear more.

Update: Here’s what we were told by a tipster. I want to share a few choice quotes I got from them related to the meeting and recent actions by the firm, they told us things have been on a downward slide ever since well-respected advisory leadership was kicked to the curb in October. When our tipster uses “they,” they are referring to top leadership. Remember we’re just relaying what we were told here, some of which aligns closely with info we’ve gotten from other sources.

• “This is nothing but greed at the top”
• “They’re going to burn us, cash out, leave everyone with a massive amount of debt”
• “This is just gonna destroy BDO”

We’re told the super secretive partner meeting is centered around a plan to offer employee stock options, there will be a vote and it’s expected to pass though many partners are not thrilled about the direction the firm is going. You’ll recall BDO switched from a partnership to a corporation effective this past July 1. If all works out as planned, BDO senior leadership stands to make a good chunk of money. We have the figures, still digging in further.

We were also told something very interesting, our tipster informs us that private equity is involved. Past tense, as in they’ve been in the picture. If true, it’s curious this somehow remained under wraps all this time. There’s a whole bunch of debt involved here, don’t want to drop names or numbers yet but they’re both big. Allegedly. (Edit: someone name dropped this PE firm in the comments, same firm we were told)

There’s more but that’s the gist of it. TL;DR: ESOP. Those who guessed this is good news for partners you’re right, but our tipster says only about 100 of them really stand to benefit the most.

Again, you have something to add to this coverage don’t be afraid to get in touch. I mean that more literally that I’d like to. We’re on Signal if you prefer to use that.

Update #2: A comment below says RSM leadership will be in attendance and there’s a merger in the works (!). We may have to resume wild speculation until Wednesday.

Update #3: Now that FT has reported the PE deal, we can add some more information from our tipster. As far as payouts go, we’re told Wayne Berson will receive $25-30 million. Variable share partners will see $1-2 million and fixed share partners will get $30-50,000 each. As we understand it, Apollo will get 48% of the firm, 42% will be made available in the ESOP, Wayne Berson holds 1% and the remaining bits are scattered among leadership. Our tipster told us the Apollo deal “was not done in good faith.” More on that later.