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Vedder Thinking | News Steven Berger Quoted in Bloomberg Tax Article Discussing ‘Going Concern’ Warning Signals from Businesses

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Finance & Transactions Shareholder Steven R. Berger was recently quoted in the Bloomberg Tax and Accounting article, “Dave & Buster’s ‘Going Concern’ Warning Signals Wave to Come,” where he commented on the recent uptick in ‘Going Concern’ notices filed by companies alerting investors that the company may not survive the next year. Having been one of the first to issue a notice to investors, the article uses Dave & Buster’s as a reference point for issues affecting businesses in various industries throughout the United States.

The outbreak of COVID-19 has forced businesses to lay off or furlough employees alongside slashes to executive compensation. Despite efforts to cut costs, cessation of revenue due to shuttered businesses has lead experts to the conclusion that Dave & Busters is the first of many businesses soon to follows with notices of going concern. When it comes to disclosing liquidity concerns to investors, Mr. Berger believes that “management should be transparent about the company’s cash flow—anything that could impact liquidity, like rent and payroll. They should also discuss any steps they’ve taken to strengthen their position, from furloughs to renegotiating debt or seeking debt-covenant waivers.” Yet, despite the nationwide shutdown and growing economic uncertainty, Mr. Berger states “the accounting disclosure is a long-term measure and not a guarantee that the company will go out of business. It’s not a death knell; it’s a disclosure."

To read the article in full, please click here.


Steven R. Berger