Background

FRP was instructed by a transport technology company to review and give an opinion on a warranty claim arising in respect of buying a business in which the sale completed in 2021. FRP’s Forensic Services team were instructed to review the completion accounts and to give a view on the warranty claim and the potential loss arising.

Action

Forensic Services Partner, Fiona Hotston Moore was engaged as party expert. We reviewed the completion accounts and management accounting with particular reference to the recognition of income on the customer contracts. In our opinion the completion accounts materially overstated the income and there was a claim under the warranties.

Outcome

Following the preparation and disclosure of our report, and correspondence between the parties, the matter settled in favour of our client and therefore avoided protracted and costly litigation.