Litigation

Litigation Support and Expert Witness Services

Serving as an expert witness, Tony Sondhi has been involved in critical legal matters concerning securitization, consolidation, revenue, leasing, VIE and investment analysis including valuations. Below are examples of Expert Witness and Litigation cases from 1992 to date.

Issue: Whether credit card receivable and other finance subsidiaries of industrial, manufacturing, and leasing companies have economic substance or are tax avoidance vehicles.

Experience: NY State agreed with my testimony as to the economic nature and business rationale for the creation and operation of finance subsidiaries on behalf of Sears, Roebuck Acceptance Corp. I have served as an expert witness on nearly a dozen cases involving state tax and finance companies. The financial reporting standards involved relate to transfers of receivables.

Issue: Economics of mortgage securitizations

Experience: I worked on cases involving large banks and mortgage originators in the wake of the 2008 financial crisis. This is a complex area involving financial reporting, finance and derivatives. I also served on an advisory committee to the Bank of International Settlements, The US Federal Reserve and the IASB on fair value measures of illiquid securities. The committee report was used to develop measurement standards in 2008 and 2009

Issue: Whether derivative transactions (for example, trades in futures, forwards, and options should be included in revenue base for state taxation.

Issue: Whether intercompany dividends, loans and other transactions are arm’s-length transactions at market values

Issues: I have served as an expert witness on several cases involving revenue reporting. The companies involved were primarily software and/or cloud computing companies.

Issue: Whether revenue and/or costs were appropriately reported (timing of recognition) and measured for the purpose acquisition-related earnout disputes. Examples include deferred acquisition costs in insurance companies, and revenue or EBITDA and other non-GAAP measurement in various industries.

Issue: Whether debt was appropriately reported and used to measure bond covenants and debt/equity ratios.

Issue: Whether a company (example – a company that manages payroll and withholds federal, state, and local taxes) collecting payment held in escrow qualified as an investment company.

Issue: Whether the financial statements accurately reflected earnings, cash flow, and the financial position of a company in the assessment of whether it qualified for self-insurance under Florida State laws.

Issues: I served as an expert witness on the Enron litigation wherein the issues ranged from securitizations to complex derivatives, variable interest entities, consolidation, as well as several financial reporting and investment analysis issues.

Issue: Financial reporting and fair value measurement of acquired deferred revenue and other liabilities

Tony Sondhi Consulting

Other Areas of Litigation Support:

Whether split dollar life insurance is a post-employment benefit

Separation and allocation of transaction prices in multiple deliverable arrangements

Whether and when a legal verdict qualifies as an accounts receivable

Receivables from customers in industries under severe economic stress