SOURCE: Marks Paneth & Shron LLP

Marks Paneth & Shron LLP

September 15, 2010 10:15 ET

Valuation Disputes Related to Hedge Fund Breakups Can Be Avoided, Says Specialist From Marks Paneth & Shron

Efficient and Harmonious Hedge Fund Breakups Are Possible, According to Article by Donald M. May in "Hedge Fund Law Report"

NEW YORK CITY, NY--(Marketwire - September 15, 2010) - Donald M. May, Ph.D, a Director in the Litigation and Corporate Financial Advisory Services Group at Marks Paneth & Shron LLP, has published an article in the "Hedge Fund Law Report" (HFLR) that details strategies for preventing valuation disputes when hedge fund general partnerships (GPs) are dissolved.

The dissolution of a hedge fund can be dizzyingly complex, more so than in the breakup of most other types of businesses. A proper valuation of the fund's current assets and an accurate estimate of its future performance are required in order to redeem the holdings of GP limited partners and estimate the impact on investors. This is no mean feat.

In the HFLR article, Dr. May discusses ways to approach the process efficiently -- and in a way that avoids debilitating valuation disputes. He also addresses:

  • The process by which hedge fund GP interests and hedge fund assets should be valued.
  • The valuation implications of the departure of a GP limited partner. (Note: Sometimes hedge fund's general partner itself is a limited partnership. Hence the phrase "GP limited partners.")
  • Three specific alternative valuation methods for valuing GP limited partnership interests.
  • The consequences of ambiguously drafted or nonexistent distribution agreements.
  • Specific guidelines for drafting valuation guidelines in hedge fund general partnership agreements.

The full text of Dr. May's article can be found in the Marks Paneth & Shron Library.

To speak with Dr. May about valuation methodologies, please contact Itay Engelman of Sommerfield Communications at 212.255.8386 or via email at itay@sommerfield.com.

About Marks Paneth & Shron

Marks Paneth & Shron LLP is an accounting firm with nearly 475 people, of whom 64 are partners and principals. The firm provides businesses with a full range of auditing, accounting, tax, bankruptcy and restructuring services as well as litigation and corporate financial advisory services to domestic and international clients. The firm also specializes in providing tax advisory and consulting for high-net-worth individuals and their families, as well as a wide range of services for international, real estate, media, entertainment, nonprofit, professional and financial services and energy clients. Visit www.markspaneth.com for more information.

About Dr. Donald M. May

Donald M. May, Ph.D., is a valuation specialist with nearly twenty years of experience in industry, academia and public accounting and deep expertise in litigation and strategic consulting. Earlier in his career, Dr. May was an Assistant Professor in the Sloan School of Management at the Massachusetts Institute of Technology where he published research and taught MBA and Ph.D. level classes in economics, accounting, financial statement analysis and statistics.

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