Forensic Accountant & Business Valuation Expert for North Carolina Matters

Working With Out-of-State Counsel

Joey Friedman, CPA, P.A. is a litigation-focused forensic accounting and business valuation firm engaged by counsel in North Carolina matters. The firm is based in Florida and works nationwide, handling records-based analysis remotely and traveling for deposition and trial testimony as a matter requires. Mr. Friedman has testified in state, federal and foreign courts, for plaintiffs and defendants, in civil, criminal and marital proceedings. The firm does not prepare income tax returns and does not provide tax planning services.

Equitable distribution in North Carolina is heard in the District Court Division of the General Court of Justice. Federal matters are heard in North Carolina’s three federal judicial districts — Eastern, Middle and Western. Mr. Friedman is regularly engaged in matters in states across the United States, as well as in international matters, and the firm accepts North Carolina engagements in state and federal proceedings alike.

Retaining a forensic accountant from outside the state is common in financial disputes, and in some matters it is preferred:

• Conflict distance. An out-of-state expert is less likely to have prior or ongoing relationships with the parties, their businesses, their banks or their other advisors.
• Records-based work travels. Tracing, normalization and appreciation analysis are performed on documents and data. The location of the analyst does not change what the records show.
• Independence is visible. Where the parties move in the same local professional circles, distance from those circles is easier to explain to a finder of fact.

Why the Third Category Changes the Work

Most equitable-distribution states sort assets into marital and separate and argue about the boundary. North Carolina adds a third bucket, and it is defined by time rather than by origin.

Divisible property is about the gap between separation and distribution

Divisible property picks up appreciation and diminution in the value of marital property occurring after the date of separation and before distribution; property received in that window that was earned by either spouse’s efforts during the marriage; passive income from marital property received after separation, such as interest and dividends; and passive increases and decreases in marital debt, including financing charges and interest. The estate therefore has to be measured twice — once as of separation and once as of distribution — and the difference has to be explained, not just reported.

Passive movement is shared. Active movement is not.

Change in value that results from a spouse’s own post-separation actions or activities is excluded from divisible property. That is the analytical heart of a North Carolina engagement. If a business was worth one figure at separation and a different figure three years later, the question is not simply what the difference is. It is how much of that difference the market, the industry and the passage of time produced, and how much the operating spouse produced by running the company — hiring, winning customers, cutting costs, taking risks.

For a brokerage account the decomposition is comparatively tractable: contributions and withdrawals are identifiable and the remainder can be tested against market and sector benchmarks. For an operating business it is genuinely difficult, because the owner’s post-separation labour and the enterprise’s own momentum move the same number. It is done with the operating record — revenue by customer, margin by period, headcount, capital spending and the timing of specific decisions — rather than with a single growth rate applied to a stale valuation.

A long separation makes the analysis bigger, not simpler

The window runs to distribution, so delay expands the work. A case that settles a year after separation and a case that reaches distribution four years after separation are not the same engagement, even on identical assets. Where records for the intervening period are incomplete, reconstructing them is part of the work.

Debt moves too

Passive increases and decreases in marital debt are divisible, along with the financing charges and interest attached to them. Debt is frequently left out of the post-separation analysis and it should not be — interest accruing on a marital obligation across a multi-year window is a real number, and it belongs on the schedule.

Personal versus enterprise goodwill

Where a business depends on one individual, part of its value may not transfer to a new owner. The firm calculates and separates the transferable value from the non-transferable value and documents the basis for each. This is a financial calculation, not a legal determination — how that split is treated is a matter for the court under North Carolina law.

Forensic Accounting and Litigation Support

Post-Separation Value Decomposition

Valuing the estate at separation and again at distribution, then separating passive movement from movement attributable to a spouse’s post-separation actions — with the method and the benchmarks stated so both can be tested on cross-examination.

Passive Income and Marital Debt Schedules

Quantifying interest, dividends and other passive income received on marital property after separation, together with passive changes in marital debt and the financing charges attached to it, across the full window.

Business Valuation Disputes

Valuation of closely held businesses for marital dissolution, shareholder and partnership disputes and buyouts, including the normalization questions that decide most of these cases: owner compensation, discretionary expenses, related-party transactions and customer concentration.

Hidden Asset Tracing

Following money through business accounts, related entities and personal accounts to establish what exists and where it went — common in divorce and in partnership disputes where one side controlled the books.

Economic Damages and Lost Profits

Quantifying what was lost, on a method that survives cross-examination, and identifying where an opposing calculation departs from the records it claims to rest on.

Fraud and Embezzlement Investigations

Reconstruction of what happened from the underlying records — misappropriation, fictitious vendors, payroll schemes and diversion — documented so it can be presented to a court, a board or an insurer.

Rebuttal and Opposing-Expert Review

Review of an opposing expert’s report to identify method departures, unsupported assumptions and figures the underlying records do not support — in North Carolina, very often including whether the post-separation change was decomposed at all or simply attributed wholesale to one cause.

Deposition and Trial Testimony

Expert testimony in state, federal and foreign courts, in depositions, mediations, arbitrations including AAA, and jury and non-jury trials, for plaintiffs and defendants alike.

Frequently Asked Questions

We separated three years ago. Is the growth in our assets since then shared?

Partly. Passive appreciation on marital property after separation is divisible and therefore shared. Change that resulted from a spouse’s own post-separation actions is not. Which is which is a measurement question, and it is the main work in a North Carolina case with a long separation.

I kept running the business after we separated. Does my spouse share that growth?

Growth attributable to your post-separation efforts is excluded from divisible property. The difficulty is proving how much of the growth that was, because your work and the business’s own momentum affect the same figure. That decomposition is exactly what this analysis produces.

Does North Carolina split the estate fifty-fifty?

There is an equal-division presumption applied to the net value of marital property and the net value of divisible property, unless the court determines an equal division is not equitable.

What about interest that built up on our joint debt after separation?

Passive increases in marital debt, and the financing charges and interest related to it, fall within divisible property. It is frequently overlooked and it can be a substantial figure across a multi-year window.

Which court hears equitable distribution in North Carolina?

The District Court Division of the General Court of Justice.

Can a Florida-based expert work on a North Carolina case?

Yes, and it is common. The analysis is performed on documents and data, which does not depend on the analyst’s location, and the firm travels for deposition and trial testimony as a matter requires.

What records are needed to start?

Statements and valuations as of the date of separation and as close to the present as possible, for every asset and every marital debt; account statements covering the whole intervening period; and for a business, tax returns and financial statements, the general ledger in native form, bank and credit card statements and payroll records. The post-separation period is where records are most often incomplete, and reconstructing it is part of the work rather than a reason to stop.

What credentials should a financial expert in a North Carolina matter hold?

For matters that may reach a hearing, the relevant considerations are accounting credentials, experience with the specific analysis at issue, and a record of testifying. Mr. Friedman is a CPA accredited in Business Valuation (ABV) by the AICPA and a member of the Association of Certified Fraud Examiners.

Discuss a North Carolina Matter

Joey Friedman is a CPA accredited in Business Valuation (ABV) by the AICPA, a member of the Association of Certified Fraud Examiners, with more than 25 years in accounting and forensic practice and an expert witness practice serving attorneys and litigants nationwide since 2014. To discuss whether the firm is the right fit for a matter — including scope, timing and whether an out-of-state expert suits the case — call 954-282-9615 or use the contact form. The firm accepts engagements in other states as well — see states served for how the analysis differs elsewhere.