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Case Studies


A Client Evaluates Strategic Alternatives for Her Company

Challenge

A CEO of a high-growth private company is actively evaluating the company’s strategic alternatives.  The Chairman of her Board referred her to us to discuss the personal and professional considerations of various transactions.   

Analysis

We created a framework to evaluate the pros/cons for the company, the CEO’s professional trajectory, and the family of options including selling the business outright or selling a majority or minority stake.  

We incorporated not only the personal financial implications of these scenarios, but also the impact to spouse’s career, children’s schooling, community involvement, and other aspects of family life.

Via Solutions

We helped the Client and her spouse articulate how they define success individually and as a family.  We then evaluated the likely outcome of each of the various transaction options.  

The Client ultimately decided to sell the company to a publicly-traded firm and stay on as a senior executive. The proposed deal structure was atypical, and we engaged with the acquiring company’s M&A department to quantify the impact on our Client’s tax bill.  


Aging Parents’ Affairs Are In Disarray

Challenge

A Client’s widowed mother had assets scattered across multiple banks and brokers, with accounts titled in her individual name. These assets included cash, an individual security whose value had plummeted, and a handful of legacy stock positions with large unrealized capital gains.

Analysis

We compiled a detailed asset inventory, which illustrated the potential risks inherent in the concentrated stock positions.   Due to the concentrated stock positions, the potential risk inherent in the portfolio was much higher than she could tolerate.

Furthermore, a large cash balance in an expensive money market fund earned virtually nothing, and she was paying a high interest rate on a margin loan.  

We incorporated not only the personal financial implications of these scenarios, but also the impact to spouse’s career, children’s schooling, community involvement, and other aspects of family life.

Via Solutions

We reduced overall portfolio risk by realizing the loss, offsetting realized gains in legacy positions, and hedging the remaining legacy positions. We also paid off the loan and invested the cash balance in short-term treasury securities.  

Then, we designed the portfolio to generate income to pay for the mother’s care and reduce portfolio volatility.

Finally, we consolidated accounts with a single custodian, titling the account in a new revocable trust (with its own tax ID #) to avoid probate and facilitate estate settlement upon the Mother’s death.


Client “Felt Like a Number”

Challenge

Our Client’s former advisory firm had been acquired by a bank, and our Client began to feel like “an account number” and “target for the product-of-the-week.”  To add insult to injury, his investment portfolio had considerably underperformed its benchmark each year for over five years.

Analysis

Our analysis showed that the embedded expense ratios in portfolio’s investment vehicles were relatively high.  Indeed, the worst performing (and most expensive) investments were the bank’s proprietary products.

Via Solutions

We migrated portfolio holdings from expensive actively-managed funds to lower cost index-based investments (mutual funds and ETFs) in a tax-efficient manner.  By significantly reducing embedded investment expenses, we increased the probability that the portfolio would match benchmark returns.


Providing for Mother and Supporting Charity

Challenge

A Client had two financial intentions that were seemingly in conflict: (1) provide income for his Mother, and (2) contribute to her alma mater.

Analysis

In consultation with the Client’s attorney and accountant, we evaluated the pros/cons of various techniques to accomplish these goals – either separately or in combination. 

Via Solutions

We worked with the development office of the Clients’ alma mater to design a charitable gift annuity.  Under the annuity contract, the Client makes an irrevocable charitable gift to the university while the Client’s Mother receives an income stream for the rest of her life.   We identified the optimal assets with which to fund the gift and worked with the Client’s accountant to incorporate this transaction in the context of the overall tax plan. 


Corner Case Studies

Situations That Are Outside Our Normal Scope of Client Work


A Private Foundation Was Paying Taxes

Challenge

Our Client’s former advisory firm had been acquired by a bank, and our Client began to feel like “an account number” and “target for the product-of-the-week.”  To add insult to injury, his investment portfolio had considerably underperformed its benchmark each year for over five years.

Analysis

We analyzed the foundation’s investment holdings, tax filings, and custodial statements.  The portfolio included the stock of a Canadian company that paid dividends, and the custodian of the foundation’s assets was remitting taxes that would be due on those dividends to the Canada Revenue Agency (“CRA”).   

Via Solutions

We petitioned the CRA to issue a letter acknowledging that, under the current tax treaty between Canada and the United States, a US private foundation is exempt from Canadian taxation.  As a result, the custodian stopped withholding, and we successfully petitioned the CRA to issue five years’ worth of tax refunds.


A Loan to A Friend Becomes Delinquent

Challenge

A Client had loaned money to a friend who had experienced a temporary cash crunch, but even after months at a lucrative new job, the friend had not repaid the loan.

Analysis

Our Client felt taken advantage of, and the friend was embarrassed that he had not repaid the loan.  Naturally, the loan was a charged topic in the friendship, and there was no trusted “financial neutral” who could facilitate a resolution.

Via Solutions

We talked with the Client about acceptable repayment terms and then presented those options to the borrower.  We agreed on a payment plan, which we memorialized in a written loan agreement. The loan was repaid in full, and we send the payoff information to the Client’s accountant for tax filing.


A Deal at Risk

Challenge

A business owner was about to lose an acquisition opportunity due to an unexplained funding delay.

Analysis

The client had secured a Chinese investor to fund the deal, but after more than one month, the investor’s bank had not released the funds. 

Via Solutions

The Chinese investor’s global bank had successfully transmitted funds from Beijing to New York via Hong Kong.  However, the funds got stuck in the bank’s “Investigations Management” group in New York.

Tapping our deep industry network, we contacted a senior banker in the New York office who escalated the issue and got the wire released to the Boston branch of the bank.