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included with the business owners’ insurance policy often does not include computer fraud or funds transfer fraud, which are becoming increasingly more common as the way people are stealing monies. This requires the purchase of a stand-alone crime policy.” Over the course of the embezzlement, Barnes made off with an average of more than $481,000 a year, and in 2014, her biggest year, defrauded her firm out of an astounding $807,206, according to court documents. At $1.9 million, Barnes’ biggest payments were for credit cards. But she also spent more than $770,000 in transfers to relatives, $425,000 for shopping and travel, and another $424,000 on vehicles. She spent nearly $108,000 at restaurants and for food. The FBI investigated the case. U.S. District Court Judge Roseann Ketchmark is presiding. Assistant U.S. Attorney Kathleen D. Mahoney is prosecuting. This is not the first controversy to roil the Kansas City archi- tecture industry this year. BNIM , another major firm with deep roots in the city, abandoned its plans to renovate and occupy a building in the Crossroads Arts District due to ve- hement opposition from school district patrons who op- posed BNIM’s use of a major tax incentive to help finance the deal. BNIM has since made arrangements to move its headquar- ters to the Crown Center in downtown Kansas City. and star employees can walk out the door. Competitors can win work you thought you’d be able to get. These things hap- pen. By the same token, selling your firm doesn’t absolve you of all of the stresses of running a business once you sign on the dotted line. You’re still on the hook for plenty of the risks and liabilities associated with your business. Sellers are paid a nice chunk of money on the belief that they are handing over a business that can generate future cash flow. Reps and war- ranties, earnouts, and employment agreement are reasonable requests from buyers to mitigate these cash flow risks from being different than represented. I’m sure there are many more characteristics of successful M&A deals, but these seem to be found in deals of all sizes and when working with buyers and sellers. Email me with some of the other “tried and true” characteristics you’ve found in the market – we’d love to hear from you! JAMIE CLAIRE KISER is Zweig Group’s director of M&A services. Contact her at jkiser@zweiggroup.com. “I tell all of my clients to talk about whatever they want on the first call, but to focus the whole time on whether they trust the person on the other end of the phone. If something in your gut is giving you pause about the person you’re dealing with, the deal almost always falls apart.”

JAMIE CLAIRE KISER, from page 5

there’s only one party to the transaction – but I have yet to work on a deal in which my client says that they do not trust the person they are dealing with. M&A cannot be an adver- sarial process – it’s about building a trusting relationship and teaming up to create a brighter future for everyone involved. Lack of trust is expensive. Waiting to share information, or sharing information a bit at a time, just extends the time before the parties can understand if they are in the same ball- park in terms of value. Excessive due diligence – beyond what is reasonable to confirm what you thought when you made the offer in the first place – takes up the time of expensive people. 3)Accepting risk. Successful deals negotiate risk transfer and identify the real value drivers early on in the process. “I can’t tell you how many deals fall apart because one side has rejected any iota of risk. Buyers that are unwilling to accept standard business risks find themselves overpaying for firms that don’t need to be acquired.” I can’t tell you how many deals fall apart because one side has rejected any iota of risk. Buyers that are unwilling to accept standard business risks find themselves overpaying for firms that don’t need to be acquired. In the real world, key clients

EMBEZZLED, from page 7

Barnes worked. Kautz did not respond to a request for comment, and nei- ther did AIA Kansas City. Dan Knise, president and CEO at Washington, D.C.-based Ames & Gough , a specialty insurance brokerage with a fo- cus on architects, engineers, and law firms, says there’s a policy to cover the actions of people like Barnes. Over the course of the embezzlement, Barnes made off with an average of more than $481,000 a year, and in 2014, her biggest year, defrauded her firm out of an astounding $807,206, according to court documents. “The insurance is known as employee dishonesty or crime insurance,” Knise says. “Every firm should carry this cover- age.” But for a lot of the firms with coverage, there’s a few prob- lems. “Many that do carry it have inadequate limits of only $25,000 to $50,000,” Knise says. “We are finding that losses can be much bigger than that. Also, the basic crime coverage

THE ZWEIG LETTER August 29, 2016, ISSUE 1166

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