Your Future Starts Here

Background:  Client’s income exceeded the per capita average for her geography and was about 80% of the value of her husband.  The family had built a significant savings, and both parties agreed that all assets were marital property, so she was assured of a large settlement.  Her husband asserted that she should receive no alimony because of her significant savings and solid income, and both attorneys were inclined to stipulate.  Client was retired and feared uncertainty and financial risk.  She requested alimony as a means to reduce her financial risk.  Her deteriorating health and consequences of living alone were major concerns.

Analytics:  Baron Analytics conducted a multi-year forensic of the client’s expenditures to create an Income & Expense worksheet and a cashflow analysis.  Baron Analytics also conducted extensive market research of senior care facilities. Baron Analytics presented market research at mediation, showing costs and statistics for senior care residences and services.  Opposing counsel argued that client (via Baron Analytics) was ‘gold platting’ estimated expenses.  However, Baron Analytics presented benchmark and statistical evidence to show that client’s estimates were modest by both local and national norms.  Opposing counsel could not produce any evidence to refute.

Impact:  Despite resistance from spouse, without a more credible counter-argument, he was forced to accept client’s terms for alimony.

• Client received a lifetime alimony for the full value justified by Baron Analytics, effectively gaining her almost 10% more net income than her spouse.  Alimony terms were estimated to be worth nearly a $500,000 for a typical lifespan.
• Baron Analytics recommended settlement terms to increase transparency and compliance.

Background:  Client had divorced about a decade earlier.  At the time, his wife worked minimally outside of the home.  She was awarded a sizable indefinite alimony at settlement.  In the ensuing years, she established a career and moved to a lower cost rural town in another state.  After the oldest child emancipated, client asked his former spouse to revise alimony and child support.  She refused to do either.

Analytics:  Baron Analytics was retained to quantify justifications for adjusting both.  Baron Analytics used its income analysis model to refine and track discovery.  This model included over 40 income elements defined in part by Virginia statute, and a large number of these elements were ignored in the divorce settlement but added by Baron Analytics to this legal motion.  Baron Analytics provided an instruction guide and intake template to the client so he could perform much of his own data gathering to save costs.  Baron Analytics used its resident OCR tools to do similar  with great efficiency for the former spouse’s data.  All data was quality audited by Baron Analytics, associated with expense categories, and auto-generated into standard Income & Expense worksheets for both parties.  Baron Analytics then conducted a cash flow analysis of the former spouse to corroborate the results of her Income & Expense worksheet and assessed her spending patterns and behaviors.  Analysis concluded that her income had grown well over an order of magnitude faster than his.  And her income far exceeded her expenses (as opposed to his), and she progressively had adopted a more lavish lifestyle with more risky investments.  The Income & Expense worksheet that she produced for discovery presented much different and more dire results, so Baron Analytics highlighted and quantified key differences.  Baron Analytics conducted a geographic economics study to quantify the lower costs that she enjoys and explained why her income supported a greater standard of living than had she remained in state near her former spouse.  Baron Analytics testified as an expert in this trial.

Impact:  Baron Analytics’ testimony proved that its model results were more comprehensive and accurate than anything produced by the former spouse.  Baron Analytics’ demonstrative exhibits formed the basis for revisions to both child support and alimony.

• Judge overruled opposing counsel’s objection of geographic equity analysis and recognized it as a a contributing factor, per Virginia statute.
• Judge recognized Baron Analytics’ income estimates for both parties as most credible as a basis for revising child support and scrutinizing alimony.
• Judge ended alimony and ordered the former spouse to reimburse client for payments in arears.

Background:  Former spouse received child support to help care for the parents’ multiple children  Monthly payments included an upward deviation expected to cover expensive activities that both parents described in their divorce trial.  However, client continued to pay half of activity expenses due to threat that the former spouse would cancel activities.  The oldest child emancipated.  Client also was the only parent saving for the children’s college expenses.  Client proposed a modest reduction of monthly child support payments to remove the upwards deviation and some considerations for the emancipated child.  Former spouse refused to cooperate at first and then insisted that she was due for an increase in child support.

Analytics:  Baron Analytics used its income model to guide research for over 40 income types identified by Virginia statute.  In doing so, Baron Analytics was able to create demonstrative exhibits to quantify and show that the former spouse’s income had grown noticeably closer to that of the client.  Then, Baron Analytics used its Financial Transaction database to ingest all financial transactions for client and spouse for the prior year.  This database connected to Baron Analytics’ Income & Expense (I&E) model and developed comprehensive I&E worksheets based on actual data for client and former spouse.  This provided evidence that the former spouse’s I&E worksheet did not follow her historical spending behavior and was able to identify and quantify key deviations.  By conducting a forensic analysis of the former spouse’s expenditures, Baron Analytics was able to quantify a significant discrepancy across multiple expense types for which the client was outspending the former spouse for the children’s expenses.  Baron Analytics also was able to show that the client was investing her child support payments rather than spending on the children.

Impact:  After conducting analysis and offering demonstrative exhibits for discovery, the calculus for negotiations changed.  Client was able to justify child support payments less than half of what he originally was offering.

• After the former spouse received Baron Analytics’ exhibits, she renewed attempts to negotiate a settlement before trial.  She ultimately agreed to revised payments that were well below past payments and the client’s original offer.
• In light of their contentious relationship, Baron Analytics conceived terms for the modification order that simplified and clarified financial responsibilities and avoided further litigation as the younger children emancipated.

 Background:  The family had built a significant and diverse savings portfolio.  Both parties agreed that all assets were marital property, but they disagreed strongly to what would constitute an equitable settlement.  Both earned similar income.  Both struggled to keep pace with discovery requirements, and the client’s spouse frequently ignored terms of their pendente lite ruling.  Client feared uncertainty and financial risk.  Both parties agreed to mediation, and Baron Analytics participated in person.

Analytics:  Prior to mediation, Baron Analytics gained Power of Attorney from client to collect and investigate financial assets to expedite discovery and avoid contempt of court.  All of this data was tallied in its Asset and Liabilities model to quantify and assess aspects including net present value, liquidity, cash flow and risk.  Baron Analytics used a number of financial best practices to corroborate values between different assets with different tax and payout provisions.  Baron Analytics corroborated with the client and attorney to prioritize desired assets and identify how her spouse may value assets differently.  In mediation, Baron Analytics used this model (and its dashboard) to maintain a real time comparison of net present value for proposed distributions of assets and liabilities.  Opposing counsel relied on calculator and paper and struggled to keep pace, so Baron Analytics established the foundation to assess all proposals and counter-proposals.  Client and her attorney controlled what and how dashboard data from this model were shared throughout mediations.  

Impact:  Though spouse and opposing counsel haggled and obfuscated throughout mediation, Baron Analytics was able to present an objective quantitative basis for every proposal or counter-proposal.

• Client limited her financial risk by receiving an annuity and a sizable life insurance policy on her spouse with minimal impact on her share of other assets.
• Client received 60% of the marital estate (despite her spouse claiming otherwise, based on his own layman’s assessment)
• As anticipated, the client’s assets appreciated more than 20% in the ensuing year, while Divorce Order and QDROs were ratified.  Meanwhile, spouse’s assets appreciated at less than 5%.
• Mediator (a retired Virginia Supreme Court Judge) concluded the mediation by announcing to the participants that mediation would not have achieved a conclusion and the parties would have been facing significant trial costs if not for the credible and expedient contributions of Baron Analytics.

Background:  Client and spouse had been married for about two decades.  They first started pursuing a divorce about a decade earlier and then canceled and restarted the process several times in the ensuing years.  Spouse had boasted on several occasions that client would ‘receive nothing’ if they got divorced.  After the marriage further degraded, the couple filed for divorce, and this time, the client moved from the house.  

Analytics:  Baron Analytics collected three years of financial records from the spouse and input the data into its Financial Transaction database that is used to feed many of its financial models.  Baron Analytics noticed a pattern of cash withdrawals and conducted a full spend analysis, developing a multi-year assessment of monthly expenses and cash withdrawals.  Baron Analytics discovered a modest lifestyle dominated by fast food restaurants and limited purchases from discount merchants.  However, monthly cash withdrawals accounted for a significant portion of monthly debits.  Baron Analytics created demonstrative exhibits to explain the spouse’s pattern of cash withdrawals, compare their value to other financial behaviors, tally 3 years of withdrawals, and forecast likely was withdrawn in the prior years.  Baron Analytics conducted statistical and cash flow analysis to determine the likelihood that the spouse could have redirected a much larger portion of marital assets prior to the most recent three year period and concluded that the family may have generated enough cash for him to have continued his behavior for many years prior but did not generate enough cash for him to have significantly escalated is dissipation of marital assets.

Impact:  Spouse could not produce a sufficient alibi for withdrawing so much cash, in light of his otherwise modest lifestyle.

• In mediation, spouse agreed to pay client nearly all of her marital share of the three years of cash withdrawals, if she would agree to not pursue the matter further.

Background:  Client was married for over two decades, spanning most of his and his spouse’s working lives.  The spouse’s parents were wealthy and provided savings into her investment accounts before she was married.  The wife claimed that this pre-marital savings was the root of much of the family’s marital investments.  While married, the couple employed the spouse’s family member to invest their savings.  The family member moved the couple’s investments between over two dozen funds, including many that were opened and/or closed during the marriage.  The spouse claimed that nearly all of the funds were her separate property, and she should be awarded 90% of the value of these funds.  She provided a trace developed by her family member spanning the entire marriage to justify so.  The settlement process dragged on for nearly three years, and Baron Analytics was retained a few months before trial to critique the spouse’s trace.  By this point, the spouse had provided over twenty supplements to her discovery.

Analytics:  The first challenge was the large number of discovery supplements and the poor quality and misinformation reflected.  Baron Analytics created a worksheet to catalog which statements from which dates for which funds were included in which supplements.  After that, Baron Analytics assessed the spouse’s trace.  This first included a technical review of the spouse’s trace to identify techniques used and assumptions used.  These assumptions were documented and shared with the client’s attorney to identify possible legal challenges.  Then, Baron Analytics copied the dozens of .pdf pages from the spouse’s trace report into its own tracing model by using OCR software.  With this, Baron Analytics was able to model assumptions and then conduct a line by line audit to automatically validate the spouse’s math, recalculate values based on corrections, and flag issues.  

Impact:  Baron Analytics was able to provide a number of pointed exhibits for trial.

• An exhibit showed that the spouse failed to produce evidence for the majority of deposits that she claimed to be her separate property.
• An exhibit showed a significant number of deposits occurred during the ten-plus year timeframe that the spouse was home raising the kids while the husband was paying all marital expenses. 
• An exhibit showed over two dozen errored line items in the spouse’s trace and flagged a significant withdrawal that the spouse made for herself after separation.
• An exhibit visualized and quantified the complexity of twenty years of transactions, laying doubt to the practicality of considering any tracing of these assets.
• An exhibit proportioned current asset balances versus marital deposits and withdrawals, separate deposits and withdrawals, and interest and appreciation.
• Judged ruled that all funds were fully marital, awarding 50% of their value to the client.

Background:  A husband built a small business that grew rapidly, but the husband performed his own accounting and claimed large losses in his filed taxes each year.  As marital issues escalated and divorce appeared imminent, his declared business revenue tanked.  In interrogatories, the husband claimed the business was worthless.

Analytics:  Baron Analytics conducted a deep forensic accounting of the husband’s business and produced a business valuation.  Despite threats of sanctions, the husband would not cooperate and provide financial data requested in discovery.  In some cases, he claimed that the data did not exist.  Baron Analytics identified sources to subpoena, enabling the wife’s law firm to acquire needed point of sale data (from Square, Inc.) and expense data (from bank and credit card companies).  Baron Analytics ingested all data into databases and conducted industry research to add insightful characterizations to each line item.  Using advanced analytic models and techniques, Baron Analytics was able to prove that the husband’s accounting was flawed.  Significant cash payments were excluded from revenue, and many expenses were double-counted in his tax filings.  Baron Analytics created corrected income and assets worksheets and used analytic techniques such as regression to estimate missing values.  Baron Analytics used multiple valuation methods spanning income, asset, and market approaches to arrive at a business valuation.

Impact:  Despite data withheld and misrepresented by the husband, Baron Analytics was able to value the business and prove future viability.

• Rather than no value or negative value, Baron Analytics proved that the business was worth hundreds of thousands of dollars.
• Baron Analytics proved that very little value in the business was due to his “personal goodwill” (intangible assets), so his arguments that he no longer prioritized the business had little consequence on how much the small business could or should be valued.
• Baron Analytics used management consulting techniques and market research to identify and justify business strategies that would allow the husband’s business to flourish, for any variety of the husband’s prospective role reductions.
• Baron Analytics proved and quantified the potential upside for the business over the ensuing years.