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March 5, 2024

Litigation, Fraud and QofE’s in 2023 

2023 ended much like it started – high interest rates, continuing inflation, wars, massive federal deficit, and increasing vacancy rates in metro office centers, among other challenges.

What’s in store for 2024? We predict continued volatility:

  • More receiverships as companies decline to renew office leases, creating a large oversupply of space in metro areas.
  • More bankruptcies as the lack of federal stimulus money cycles through the economy and interest rates remain high.
  • Tighter credit policies at banks as they work through non-performing loan portfolios.
  • Supply chain issues and other economic uncertainties from on-going international conflicts.
  • Continuing domestic political dissension.

What do you think? 

Email Jeff Brandlin

Here are a Few Highlights from our 2023 Engagements:

Litigation Support & Forensic Investigations

Building Construction EB 5

$200MM+ EB-5 Commercial Real Estate Litigation

  • Dispute regarding $200MM+ unpaid contractor and subcontractor secured claims against the owner / developer of a $2BN+ mixed-use commercial / residential project in Los Angeles, CA
  • Owner / developer financing included funding from U.S. EB-5 Investment Program
  • B&A is engaged as a forensic accountant for the plaintiff to investigate the defendants’ sources and uses of cash and potential operating illegalities regarding the EB-5 program
  • The case regarding the priority of secured claims is pending federal and state court rulings 

Professional Malpractice Defense


  • B&A is serving as a subject matter expert for an accountant malpractice case resulting from a partnership dispute
  • B&A supports the CPA / defendant‘s position that it had no ethical or fiduciary duty to disclose non-client information to the plaintiff
  • B&A has provided deposition testimony and awaits testifying in state court during 2024 

Workouts & Restructurings

Sporting Goods

Assignment for the Benefit of Creditors (ABC)  

  • A national sporting-goods company defaulted on the terms of its asset-based loan from a national commercial bank
  • B&A was engaged to inspect and evaluate the reported collateral and report to the bank
  • B&A’s procedures identified improper payments, overstated inventory values, and inconsistencies in collateral reporting
  • The debtor ultimately agreed to an ABC to effectuate the wind down of the business
  • The lender recovered 100% of its outstanding loan balance 

Recreational Clothing Retailer

100% Loan Recovery from Distressed Retailer

  • A specialty outdoor / recreational clothing retailer selling via Amazon, its website, and a retail store defaulted on its bank loan
  • B&A was engaged by the lender to assist the distressed borrower
  • B&A assisted in preparing and monitoring 13-week cash flow reporting for the bank and advised the borrower regarding financial forecasting, business planning, alternative sales channels, and selling to a strategic competitor
  • The borrower determined operating its retail store and competing effectively on Amazon’s price-based model were not feasible and decided to scale down the business
  • The lender recovered 100% of its outstanding principal 

QofE Assessments


Communications Company

  • National equity firm engaged B&A to assess the earnings of a start-up communications company
  • Due to a large disparity, B&A’s QofE analysis focused on free cash flow vs. reported EBITDA
  • B&A analyzed Capex investment, customer churn and profitability by service offering, and cash-to-revenue proof, in addition to customary diligence
  • Findings and recommendations were confirmatory for the investor and used for credit term negotiations with the target company
Staffing Interview

National Staffing Firm

  • B&A was engaged by an alternative lender to investigate the earnings of a national staffing firm
  • Routine diligence procedures identified several red flags
  • The lender decided to not pursue the target due to our inability to complete our procedures in a timely manner and identification of other operational inconsistencies



CFTC Receivership

  • B&A continued to provide forensic accounting services to the Receiver recommended by the CFTC regarding a multi-year receivership of a numismatic coins and gold and silver bullion seller
  • The Receiver has used B&A’s forensic analysis to help identify sources and uses of operating cash flows and identify potential claw back claims
  • The Receiver continues to utilize B&A to manage the ongoing investigation of the litigant

SEC Receivership - Ponzi Schemes

  • B&A continued to serve as receiver of two separate companies found by the SEC to have conducted Ponzi schemes
  • B&A concluded its respective forensic investigations and is in the process of monetizing claw back claims and pursuing other litigation to benefit the receivership estates
  • The 45% projected return to investors for one of the matters is double the value of investor accounts prior to the receivership

How Can We Help You?

Brandlin & Associates is an exclusive provider of financial workouts and restructurings, forensic accounting, financial due diligence and litigation support for senior lenders, mezzanine funds, private equity groups, attorneys and middle market companies.

We pride ourselves on offering superior technical expertise, years of practical experience and unparalleled service to decipher financial and operational performance metrics. As a result, our clients are able to make informed decisions in a timely manner.
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