With the acquisition of the Kenrich Group in 2019, HKA took a crucial first step in expanding its forensic accounting and commercial damages (FACD) practice in the Americas. The group has grown quickly since then, and now includes 40 experts. Last month, the FACD group took another important step as Troy Dahlberg, CPA, CFF, ABV, and Doug Farrow, CPA, CFE, CFF, joined HKA.
Before joining HKA, Dahlberg and Farrow were senior partner of KPMG’s forensic accounting, investigations and disputes practices. They will join FACD group co-leaders David Bones and Paul Donato in assisting clients with economic damages related to lost profits or business interruption, fraud investigations, and with litigation involving insurance claims, white-collar crime, shareholder disputes, and merger and post-acquisition disputes.
“When there is a large dispute, investigation or litigation involving forensic accounting or commercial damages, those who need help often think ‘large international accounting firm’ first,” said Bones, partner and co-leader of HKA’s FACD practice in the Americas. “With the addition of Troy and Doug’s expertise and multi-faceted experience, HKA now can better compete on a national and international stage with the industry’s best.”
Farrow, based in Los Angeles, was a senior partner and practice leader for KPMG Forensic in the Pacific Southwest region, and lead partner of the firm’s commercial insurance claims practice. He has significant experience assisting companies with preparing, analyzing and negotiating highly complex insurance claims, such as business interruption and property claims.
Farrow also has worked on and prepared insurance claims involving some of the world’s biggest natural and man-made disasters, from gas leaks, oil spills, cyber security breaches, hurricanes, tornados, and floods to deadly epidemics and pandemics, including COVID-19. Farrow also has provided expert witness testimony on numerous financial matters both in federal and state courts.
This year has been a significant one for insurance claims, Farrow, said, due to the COVID-19 pandemic, devastating wildfires in the western United States and other parts of the world, and other natural disasters. Farrow recommends that clients seeking relief use a well-planned and strategic approach to financial recovery, especially applicable now, as companies seek recovery for COVID-19-related losses.
“When an organization looks at recovery as result of COVID 19, they have to look at the bigger picture and adopt a holistic approach that encompasses the CARES Act, commercial insurance, FEMA and other Federal/State/Local programs,” Farrow explained.
Dahlberg, based in New York, was KPMG’s national lead partner for its post-acquisition disputes practice for more than a decade. Dahlberg has been retained by both buyers and sellers as a consultant or expert in over hundreds of post-acquisition disputes. He also has been appointed as an arbiter or neutral accountant in more than 30 such disputes, and is considered one of the preeminent national and international experts in this area.
“When an entity acquires, or is acquired by, another entity, the terms and conditions of the purchase agreement almost always require post-acquisition accounting, primarily related to working capital and/or earn-out matters,” said Dahlberg. “Buyers and sellers have a tremendous need for assistance in the post-acquisition accounting process, which can include also identifying neutral accountants or arbitrators to resolve these types of disputes.”
Dahlberg also frequently has been retained in complex representation and warranty matters, working as both a consultant and expert witness in claims made by buyers against sellers, as well as in representation and warranty claims involving insurance companies. He also has co-authored a number of practice aids on both post-acquisition and representation and warranty disputes for the American Institute of Certified Public Accountants (AICPA).
“Representations and warranties are a set of assurances between sellers and buyers that are often covered by insurance policies,” Dahlberg explained. Notably, representation and warranty claims are undergoing a sharp uptick in the past year due to the negative impact of COVID-19 on the financial performance of business.
“Because of the economic difficulties, many buyers are looking at their ‘reps and warranties’ as a basis to go after sellers or insurance companies. ,” Dahlberg said. “They’ve typically got a two- to three-year window on buyers insurance policies where they can make acclaim for losses.”
Bones said the timing of adding both Farrow and Dahlberg to the FACD group is perfect, as the effects of COVID-19 on businesses throughout the US, and internationally, are quickly becoming apparent and will spur an unprecedented need for expert firms like HKA. “The impact of COVID-19 has had a tremendous impact on economic damages to businesses, insurance claims and fraud investigations,” he said. “Both public and private entities need tested, trusted FACD expertise, and we’ve built a team with the experience, credentials and skill to compete with some of the biggest, most well-known service-providers in the field.”
