An Expert Witness is typically engaged by either plaintiff or defendant counsel to prepare an Expert Report, which contains the opinions the Expert Witness has been asked to address. Each side in a litigation engages its own expert, and Rebuttal Reports are often prepared by each of the opposing experts. Expert Reports, which can range in length from 20 to over 100 pages and often contain hundreds of footnotes, are aimed specifically at helping the judge and/or jury (that is, the trier of fact) better understand specific, technical issues in a case. Unless a case is settled, an Expert Witness is typically deposed by opposing counsel on the opinions expressed and will often be called to testify at trial on the opinions in the Expert Report.
I received an MBA from the University of California at Berkeley in 1969. In 1967 and 1968, before attending graduate school, I worked as a public accountant for the certified public accounting firm of Arthur Young & Company, which is now Ernst & Young. After finishing my MBA, I worked from 1969 until 1980 at Redwood Bancorp, a San Francisco-based commercial and mortgage banking company (“Redwood”). I led a number of debt and equity capital raises, which in part buttressed the capital position of Redwood Bank, the commercial banking arm of Redwood. Redwood was a public company, and among other things I had principal responsibility for SEC reporting. When Redwood was sold in 1980, I had been the number two executive in the firm for six years. My title was Vice Chairman and Chief Operating Officer. I was on the Boards of Directors of both Redwood and Redwood Bank, a member of the Senior Loan Committee and also managed the main office branch of Redwood Bank. In addition, I served in various executive roles at our mortgage banking arm, Redwood Mortgage Company, and at Redwood Bank’s Trust Department.
I left Redwood after the sale and in 1980 and formed my own specialty investment banking firm, concentrating my practice in mergers and acquisitions (“M&A”) in the financial services field. A major project included work on the bankruptcy of ITEL, a San Francisco-based leasing company. In 1982 I was recruited by an executive search firm and joined Sutro & Co. Incorporated (“Sutro”), the prestigious California investment bank based in San Francisco. I held the positions of Executive Vice President and Chief Financial Officer and was a member of both the Executive Committee and the Board of Directors. I was also a member of Sutro’s Commitment Committee – the group that reviewed and approved all public offerings in which Sutro served as managing underwriter, including the assessment of due diligence investigations conducted. I was also involved in numerous private placements as well M&A and leveraged buyout transactions sponsored by Sutro’s Corporate Finance Department, including the assessment of due diligence investigations conducted.
I left Sutro in 1985 to again form my own investment banking firm…this time specializing in corporate turnaround work. However, I also continued to serve as a special consultant on retainer to Sutro’s Investment Banking Division, where I worked as an investment banker on numerous M&A and private equity transactions and helped build Sutro’s specialty practice aimed at financial institutions. In 1986, I also became an adjunct professor in the Business School of the University of San Francisco, teaching one graduate-level finance course a semester. In 1990, I was given a full-time, tenure-track appointment and simultaneously wound down my investment banking practice.
In 1998, I was given tenure and full professor rank, based in part on my publication of peer-reviewed articles related to privatization of state-owned entities in Poland and Russia. After receiving tenure, my Dean encouraged me to no longer seek to publish academic research papers but instead to concentrate on continuing to teach relevant and up-to-date MBA courses on venture capital and investment banking and to further distinguish myself, my School and my University by building my Expert Witness practice. Until I transitioned to Emeritus Professor in 2014, I regularly taught graduate, upper division MBA finance courses titled, “Private Equity and Venture Capital” and “Capital Markets and Investment Banking.” A hallmark of the Private Equity & Venture Capital course had been inter-active case studies presented in person by professionals from the private equity business (e.g., venture capital, leveraged buyout and mezzanine funds), institutional investors, entrepreneurs and investment and commercial bankers as well as CEOs and CFOs of public and private companies. A key element of the Capital Markets & Investment Banking course was the use of guest lectures by investment banking executives discussing customary practices in IPOs and M&A transactions and the related valuation techniques actually used by finance professionals in such transactions.
My scholarly interests focused on (i) studying the standard of care and custom and practice applicable to due diligence investigations in various types of transactions (e.g., due diligence for IPOs and follow-on offerings, due diligence for M&A and LBO transactions, due diligence for investment transactions by private equity and venture capital funds, and due diligence for loans made by commercial and mortgage lenders); (ii) studying customary practices in private equity/venture capital, investment banking, commercial banking and mortgage/debt securitizations; and (iii) studying comparative corporate governance models and practices in the USA, Europe and Asia.
I have given professional presentations as well as university lectures and courses on selected corporate finance subjects in China, Hong Kong, France, Japan, Poland, Russia, the UK and the USA. For example, I was invited as a Visiting Scholar to Northwest University in Xi’an, China in 1994, where I taught an undergraduate finance course. On that same trip, I was invited as a Visiting Scholar to the Law School at Peking University in Beijing and spoke to a group of Chinese law students about the IPO process in the USA. On a number of different trips to Hong Kong and Beijing, I taught MBA-level finance courses to executives of China Resources, an enormous state-owned enterprise with tens of thousands of employees. My University set up an accredited, in-house MBA-degree program specially designed for selected executives at China Resources. That program offered MBA classes at my University’s campus in San Francisco and venues in Hong Kong and Beijing. I have also taught in France, where I have given lectures (in French and English) to French MBA students, including lectures at the Sorbonne. In addition, I have given lectures on comparative corporate governance models and practices in both Japan and Russia.
In 1999, I was asked to design and complete a confidential M&A study of venture capital-backed firms in the late 1990s for the National Venture Capital Association (“NVCA”). This study served as the basis for the NVCA’s position paper, which I wrote, concerning the treatment of goodwill in M&A transactions. I also spent a portion of my sabbatical in 1999 doing research on how venture capital firms make their investment decisions in start-up technology companies. As a part of this research, I attended numerous partners’ meetings at New Enterprise Associates (“NEA”), one of the largest venture capital firms in the country. My involvement with NEA also included performing due diligence investigations on specific high-tech firms to aid NEA in its investment decisions.
From 1995 until 2000, I was Chairman of the Board of Harding Lawson Associates (“Harding”), a NASDAQ-traded, $150 million international environmental engineering and transportation infrastructure firm with over 1000 employees. I also served as the Chairman of Harding’s Audit Committee. Harding was sold to private investors in June 2000, and I am no longer associated with Harding.
During my career, I have served on the boards of directors of three publicly-traded companies for a combined total of more than 30 years of Board of Directors experience. Moreover, I have been directly involved as a corporate officer or director in negotiating, structuring and/or approving approximately a dozen M&A transactions, including performing, managing, reviewing and/or approving the due diligence investigations conducted. In addition, I have extensive experience in serving in various roles in the private equity business, including the role of a general partner, the role of a limited partner in two different venture capital funds and the role of an independent director in a venture capital-backed start-up.
Expert opinions, including preparation of Expert Reports as well as testimony in depositions and/or court proceedings, have been given in the following areas:
• M&A due diligence for LBOs and other business combination transactions
• Underwriter due diligence for IPOs and follow-on equity offerings and debt offerings
• Investor due diligence, including investments by venture capital, private equity and hedge funds as well as securities brokerage firms
• Investor due diligence, including investments by trustees on behalf of beneficiaries of ERISA-governed employee stock ownership plans and a multi-employer pension plan
• Lender due diligence, including commercial, mortgage loans and mortgage-backed securities
• Investment banking industry customary practice, including corporate finance, underwriting and financial advisory services (e.g., fairness opinions and solvency opinions)
• Private equity and venture capital industry customary practice, including term sheets, pre- and post-money valuations, fair price/fair process; preferred share rights; fee structure and carried interest
• Commercial and mortgage banking industry customary practice, including lending transactions, syndications, securitizations, mortgage banking and trust department activities
• Corporate governance customary practice of the Boards of C-corporations and and LLCs, special committees and executives in public and private companies related to M&A and various financing transactions