Trends in Dispute Resolution
Philip A. Zimmerman
Section of Dispute Resolution of the American Bar Association
recently held its sixth annual conference in New York City.
plenary session, “Maintaining a Healthy Corporate
Body: A Dialogue on Major Corporate Disputes of the Last
Decade,” included Neal Batson, examiner for the Enron
bankruptcy. One role he identified for CPA consultants in
bankruptcy is to help determine how it happened by examining
the use of accounting techniques to create false financial
statements. Among the lessons learned from Enron that Batson
cited were that compliance with technical accounting rules
was not enough, integrity requires adequate disclosure,
understanding the corporate business is necessary, and financial
statements need to be transparent.
Kevin D. Kreb, from PricewaterhouseCoopers LLP, and Harvey
Kelly, from AlixPartners, presented a case study of a dispute
arising from the purchase of a chain of sporting goods stores.
The dispute centered on how, in accordance with the language
of the sales contract, GAAP, and the historical accounting
policies and practices of the chain, EBITDA was to be computed
for the earn-out formula. The contract also provided for
arbitration in the event of any dispute between the buyer
and seller. Based on these facts, they posed several questions,
including: What type of background must the arbitrators
possess to best decide this dispute? Should the arbitration
be decided by a panel of three, or by one arbitrator?
A. Zimmerman, APM, CPA, is in private practice as
a mediator and arbitrator in New York and New Jersey. His
website is www.mediatorpz.com.