LEGAL DISPUTES CASE STUDIES
Court approval to close down a production facility
A heavy industry, significantly affected by a prolonged economic downturn, pursued legal approval to shut down one of its facilities, contending with legal challenges from the labor union. We provided an exhaustive time series analysis of each factory’s performance and the firm as a whole, alongside a strategic and competitive evaluation. Our analysis conclusively showed that the closure of the less efficient facility was unavoidable, essential for safeguarding the company’s long-term financial health in light of prevailing local and international market dynamics.
Legal use in an arbitration tribunal
Following the 2008 financial crisis’s outbreak, both the lessor and lessee of a large property faced severe economic challenges. The lessor struggled with high debt repayments, while the lessee faced difficulties fulfilling lease obligations due to the economic downturn. The case was presented to a three-party arbitration tribunal. At the Judges’ request, we conducted an independent evaluation of the financial statements and solvency of both parties to ascertain their ability to meet the lease terms and maintain solvency under various scenarios.
Legal use in a corporate dispute, testimony in court
An industrial company was defrauded by a materials supplier, in collusion with a trusted employee. The fraud entailed fictitious purchases of raw materials totaling approximately €1 million over four years. We were appointed as technical advisors to assist with a judicial report being prepared by a court-appointed accounting expert. Our services included scrutinizing production methods, conducting a detailed analysis of costs, operations, truck capacity, and relevant documents to expose the fraud (i.e., the invoiced quantities could never have been delivered). Additionally, we addressed inquiries and countered arguments presented by the judicial expert throughout his report’s preparation, which lasted over a year, and provided a detailed second opinion on the final judicial report to rebut the arguments made. Finally, we delivered oral testimony before the competent Five-judge Felony Appeals Court of Athens.
Legal use to reclaim damages
A systemic bank incurred significant losses from loans granted without adhering to the bank’s lending criteria, a result of employee fraud. The incurred losses were insured against fraud with a major insurance company. Upon the bank’s request, using a dataset provided to us and employing a computer programmer, we validated the bank’s claim as fully justifiable. We estimated the average accrued interest rate per loan and loan period, confirming that these rates were comparable with the prevailing interest rates during the lending period.
Second opinion on an internal audit report: Legal use in a court dispute, testimony in court
Following a company co-ownership dispute, the court mandated the cancellation of a minority shareholder’s shares and compensation based on the company’s fair value. Subsequent legal battles involved accusations of fraud, embezzlement, and defamation. Our client requested a second opinion on an internal audit report that had led to charges against them. We meticulously evaluated the audit report, applying accounting standards, internal control guidelines, legal requirements for record-keeping under Greek legislation, and best practices to successfully counter the allegations made.
Second opinion in a criminal case, in the aftermath of a corporate dispute
In a legal dispute among the beneficiaries of the owner of a family business who had passed away, we were asked to provide a second opinion on an internal audit report that had been prepared by an accounting expert at the request of the group of minority shareholders. The report claimed a series of acts of mismanagement, embezzlement, violation of corporate and tax legislation, on the part of the management of the business representing the majority shareholdings. We were able to refute all claims and demonstrate that the report was based on misunderstanding of a number of provisions of corporate and tax legislation, accounting and financial reporting practices, as well as the realities of the business.
Examination of accounting records for legal use in a corporate dispute
Our client, a group of companies, initiated legal proceedings against the new owners of two subsidiaries that had become independent, regarding outstanding balances of receivables and payables as of a specific date. Our services involved preparing a report, based on a meticulous examination of maintained accounting records, to document the amounts due or claimed between the two parties for judicial purposes.
Evaluating matters relating to post-dated checks for legal use in a corporate dispute
Our client, a lawyer in public practice and a non-executive director in a company, issued a post-dated check as a promise for a future loan to that company, adhering to the common practice in Greece at the time. This arrangement was formalized in a written agreement stipulating that the check: a) should not be endorsed to a third party, b) should not be presented to the bank for payment before the expiration date, and c) in any case, should not be presented for payment without prior notification to the issuer. Despite these conditions, the company endorsed the check to one of its suppliers, who had agreed in writing to all the attached terms. Contrary to the agreed terms, the supplier presented the check for payment before the expiration date without notifying either the issuer or the company beforehand. In our report, we detailed the customary and long-standing practice of gentlemen’s agreements in Greece regarding post-dated checks and highlighted other significant aspects of the case relevant to the court.
Interpretation of accounting standards: Second opinion for legal use in a dispute
In the context of a legal dispute over the control of a company which had undergone a full-scale restructuring, our client requested a second opinion on a report prepared by a certified auditor appointed by the court. The report of the judicial expert referred to a number of issues relating to the preparation and audit of the financial statement that had been used in the negotiations for, and approval of, the restructuring of the company. In our second opinion report, we rebutted the core of the arguments made by the judicial expert, making use of the text and explanatory material of IFRSs, International Standards on Auditing and Greek legislation.
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