<?xml version="1.0" encoding="utf-8"?>
<rss version="2.0"
    xmlns:dc="http://purl.org/dc/elements/1.1/"
    xmlns:sy="http://purl.org/rss/1.0/modules/syndication/"
    xmlns:admin="http://webns.net/mvcb/"
    xmlns:rdf="http://www.w3.org/1999/02/22-rdf-syntax-ns#"
    xmlns:content="http://purl.org/rss/1.0/modules/content/">

    <channel>
    
    <title>Opinon</title>
   <link>http://www.virginiabusiness.com/index.php/section_opinion/index</link>
    <description>Our view and your view of the Virginia business community</description>
    <dc:language>en</dc:language>
    <dc:creator>vmedina@mediagneeral.com</dc:creator>
    <dc:rights>Copyright 2008</dc:rights>
    <dc:date>2008-05-02T05:01:01-05:00</dc:date>
    <admin:generatorAgent rdf:resource="http://www.pmachine.com/" />
    

    <item>
      <title>Selling ideas to multicultural markets</title>
      <link>http://www.virginiabusiness.com/index.php/section_opinion/article/selling&#45;ideas&#45;to&#45;multicultural&#45;markets/</link>
      <description>Commentary and Analysis</description>
      <dc:subject>Opinion, Viewpoints</dc:subject>
      <content:encoded><![CDATA[<p>Consumer giants like General Motors and McDonald&#8217;s have been strategically selling products to multicultural markets for years and have developed enviable brand loyalty as a result. 
</p>
<p>
But for organizations pushing ideas and issues instead of Chevys and Big Macs, the tracks of such best-practice marketers are tougher to follow.
<br />
As director of public relations and multicultural marketing for RightMinds, a Richmond-based integrated marketing agency, I&#8217;ve been approached by a number of clients about the best way to gain &#8220;traction&#8221; with the exploding U.S. Hispanic market. During the past 18 years, I&#8217;ve developed multicultural outreach strategies for brands such as Coca-Cola, Target, Honda, Verizon and others. I&#8217;ve learned that each client&#8217;s challenge is slightly different. But for clients promoting ideas instead of products, the challenge can be even more complex.
<br />
I&#8217;ve been tapped recently to develop a Hispanic outreach strategy for a leading environmental organization I&#8217;ll call &#8220;Big Green.&#8221; Big Green has decided to refocus its energy on the complex problem of global warming. In developing its plan of attack, it came to the same conclusion as many other communicators: The U.S. Hispanic market has become too big to ignore. This group is formidable and growing. Its current population of 45 million now hovers around 15 percent of the total U.S. population. That number is expected to rise to 100 million, 25 percent of the total population by 2050. 
<br />
For some marketers, there is an urgent need to develop a brand identity within this market before competitors can jump in. Big Green believes that it must engage this critical audience effectively to move its environmental agenda forward.
<br />
From my vantage point, the job is made tougher by the fact that environmental issues have not traditionally been top of mind with Hispanic grass-roots organizations. Issues such as education, employment and health care are all at the top of their agendas. Global warming has been seen as too esoteric for audiences grappling with basic needs.
<br />
When faced with the task at hand and these challenges, here&#8217;s my plan.
</p>
<p>
Meet the players.&nbsp; Upon getting my marching orders from Big Green, I attended two high-profile Hispanic conferences that featured discussions about global warming. Although one conference was held in Washington, D.C., and the other was in Los Angeles a week later, the same folks could be found at the podium when it came time to talk about global warming. I immediately realized that these were the key players who had feet planted firmly in the Hispanic and environmental movement camps. I quickly scheduled private meetings to pick their brains on developing a strategy for Big Green.
</p>
<p>
Where the rubber meets the road.&nbsp; The way to get traction is to figure out what messages resonate best with the target audience.&nbsp; In the Hispanic community, the concept of &#8220;environmental justice&#8221; is well understood. The term refers to the disproportionate environmental risks borne by poor communities and people of color. Environmental justice provides the conceptual bridge to global warming that Big Green needs. 
</p>
<p>
Strategy first. For Big Green, we&#8217;re putting together a two-pronged strategy.&nbsp; The first includes partnerships with grass-roots organizations that share its interests. These alliances allow Big Green not only to ride the coattails of their partners&#8217; credibility, but also to utilize their contacts, membership lists, newsletters, events and so on.&nbsp; The second prong involves doing some form of direct outreach to the Hispanic population, perhaps such as audio news releases on Spanish-language radio. This effort offers Big Green an opportunity to create brand awareness and identity.
</p>
<p>
Bring in the big bats. Lastly, we&#8217;ll be adding some valuable bench strength to our team in the form of the Big Green Hispanic Leadership Council, which will include well-known leaders in the Hispanic community. A leadership council, sometimes known in the industry as &#8220;grasstops,&#8221; has a number of benefits: It provides an entr&#233;e to the community that can otherwise be difficult to obtain; it bolsters credibility; and it can provide intelligence about how the organization can best reach the target market. Think of it as the best focus group in the world (and it meets quarterly in your boardroom).
<br />
Here are some other tips to remember: It&#8217;s critical to get buy-in from the top of your organization to mount a sustained effort, resource allocation should be commensurate with your goals, and seek expert advice when you need it.
<br />
	
<br />
Dan Durazo is a senior strategist at RightMinds.&nbsp; For more information, log on to <a href="http://www.rightminds.com">http://www.rightminds.com</a>  
</p>]]></content:encoded>
      <dc:date>2008-05-02T05:01:01-05:00</dc:date>
    </item>

    <item>
      <title>Overturning stereotypes</title>
      <link>http://www.virginiabusiness.com/index.php/section_opinion/article/overturning&#45;stereotypes/</link>
      <description>Virginia&#8217;s horse industry</description>
      <dc:subject>Opinion, Our View</dc:subject>
      <content:encoded><![CDATA[<p>The stereotype of a Virginia horse owner is someone dressed in tweed raising Thoroughbreds on a palatial Middleburg estate. But the truth is that, while Virginia is the birthplace of Secretariat, its horse industry is dominated by middle-class families facing everyday concerns such as the cost of gasoline and the slowdown in the economy.
</p>
<p>
In our cover story, Heather B. Hayes, a writer based in Amherst County, reports that Virginia has a $1.65 billion equine industry because so many residents can still afford to own horses and find room to ride them here.&nbsp; It is a lifestyle choice that some people have moved to Virginia to enjoy. But it also is an industry threatened by inflation, sprawl and the unexpected consequences of eliminating slaughterhouses.
</p>
<p>
The horse industry isn&#8217;t the only thing in Virginia with an out-of-date image. Norfolk for years endured a reputation as a gritty Navy town. But in recent years, the city has transformed its downtown. In our Hampton Roads regional report, Elizabeth Cooper, a Chesapeake resident, reveals how Norfolk &#8220;got it right&#8221; in attracting retailers, office workers, residents and tourists.
</p>
<p>
Much of Norfolk&#8217;s attraction lies in its access to water. That asset could become a threat if global warming continues, according to climate experts. In fact, a recent survey identifies climate change as the top risk facing the property and casualty insurance industry. In a story tracking risk management trends, Richmond writer Joan Tupponce explains how industry concerns about climate change are moving east to west, from Europe and Asia to the United States.
</p>
<p>
Of more immediate concern to many Virginia businesses and local governments is finding and keeping a skilled work force. Part of the problem is the scarcity of affordable housing in some parts of the state. Andrew Petkofsky, a writer based in Williamsburg, looks at innovative efforts to attack the issue.
<br />
Virginia has a reputation of being fertile ground for business innovations. That is one reason Virginia Business has partnered with the Virginia Chamber of Commerce for 13 years in recognizing the Fantastic 50, the commonwealth&#8217;s fastest-growing private companies. This year&#8217;s list is headed by Oberon Associates Inc. a Manassas-based company whose revenues grew 4,732 percent in four years. That is a gallop even Secretariat can&#8217;t match.
<br />

</p>]]></content:encoded>
      <dc:date>2008-05-01T05:01:00-05:00</dc:date>
    </item>

    <item>
      <title>Watching paint dry</title>
      <link>http://www.virginiabusiness.com/index.php/section_opinion/article/watching&#45;paint&#45;dry/</link>
      <description>From the Publisher</description>
      <dc:subject>Opinion, Our View</dc:subject>
      <content:encoded><![CDATA[<p>Since joining Virginia Business 16 months ago, I&#8217;ve spent a reasonable amount of time observing the progress of Virginia&#8217;s General Assembly.
</p>
<p>
The recent sessions were most visibly marked by the completion of the Capitol&#8217;s expansion and renovation.&nbsp; However, the phrase &#8220;Watching paint dry&#8221;  is more aptly used to describe the legislature&#8217;s progress on major issues.
</p>
<p>
Being a business person, I&#8217;d like to see progress.&nbsp; Take transportation as an example.&nbsp; Prior to 2007, there had already been 20 years of inaction.
</p>
<p>
Angst-ridden HB 3202 on transportation passed last year with imperfections, not the least of which turned out to be an unconstitutional funding mechanism.
</p>
<p>
The problem was obvious enough to be overturned unanimously by the state Supreme Court.&nbsp; Presumably, this should have been fixed earlier in the process.&nbsp; In any event, we&#8217;re still waiting for action on transportation.
</p>
<p>
Another observation is that issues backed by lobbyists seem to have a better likelihood of making it to a vote.&nbsp; Payday lending regulations aren&#8217;t nearly as important as transportation funding, but they probably saw an equal amount of time on the floor.
</p>
<p>
Other bills are sidelined by small subcommittees, sometimes just a handful of people.&nbsp; SB 38, which would establish a non-partisan committee to oversee redistricting, met such a fate. After being passed by the Senate, the bill was relegated to a House subcommittee.
</p>
<p>
In days past, being conservative largely meant being fiscally conservative.&nbsp;  Campaign phrases like &#8220;No new taxes&#8221; have now been elevated to the realm of social conservatism, more similar to voting for the right to life than sound economic policy.
</p>
<p>
Virginia is a top-rated business state, but we will not stay in this position without investments in infrastructure.&nbsp; Effective state government requires that partisan politics and regionalism be overcome.
</p>
<p>
Collaborative thinking is a fairly common characteristic among successful business leaders.&nbsp; The commonwealth has many gifted individual legislators.&nbsp; After all, Virginia is the mother of the presidents.
</p>
<p>
What is lacking is consensus on major issues.&nbsp; Moving forward will require collaboration and the ability to let the common good supersede campaign politics and party-centric thinking. In the meantime, it&#8217;s a lit&#173;tle like watching paint dry.&nbsp;
</p>]]></content:encoded>
      <dc:date>2008-05-01T05:01:00-05:00</dc:date>
    </item>

    <item>
      <title>Skilled&#45;trade labor shortage looming</title>
      <link>http://www.virginiabusiness.com/index.php/section_opinion/article/skilled&#45;trade&#45;labor&#45;shortage&#45;looming/</link>
      <description>Skilled trade</description>
      <dc:subject>Opinion, Letters to the Editor</dc:subject>
      <content:encoded><![CDATA[<p>I found Garry Kranz&#8217;s article [March issue, &#8220;Building a pipeline of skilled workers&#8221;] very interesting and 
</p>
<p>
informative. I was originally drawn to it by the title in which I saw the words &#8220;skilled workers.&#8221; After further 
</p>
<p>
reading I saw that it was more geared towards college-educated students of science, math and engineering.&nbsp; 
<br />
This wasn&#8217;t quite what I expected to read about from the title in which skilled workers was the focus. I expected 
</p>
<p>
to read about the even more dire situation of the aging skilled labor for the trades that we are facing. While I 
</p>
<p>
agree that the industry needs more students of science, math and engineering, I do find from both professional and 
</p>
<p>
personal experience that today&#8217;s young folks are far more apt to attend a two- or four-year college rather than 
</p>
<p>
learn the trades. I thought your article was going to be more about that subject.
<br />
According to the American Welding Society (AWS) statistics, the average age of America&#8217;s welders is 54. The view of 
</p>
<p>
the AWS is that within the next 10 years, our welding work force will diminish by over 70 percent! That is a 
</p>
<p>
disturbing percentage considering the close proximity of Northrop Grumman Shipbuilding, not to mention Liebherr 
</p>
<p>
Mining Equipment just up the street. Howmet Castings is also a large employer of welders.&nbsp; With this news, it would 
</p>
<p>
be interesting to see if Tom Harned of the Virginia Economic Developers Association has an interest in trying to 
</p>
<p>
backfill these critical positions.&nbsp; I am all for expanding the work force with college-educated folks in math, 
</p>
<p>
science and engineering. However, the more imminent threat is at the skilled-trades level.&nbsp; 
<br />
Understanding the crucial needs to backfill the aging welding work force, our company is in the process of 
</p>
<p>
establishing an internal welder training and qualification school. Our interests are not only to fulfill our needs 
</p>
<p>
but also the needs of our community. Our work is primarily for the aerospace industry. However, we intend to train 
</p>
<p>
and qualify shipyard welders as well as welders for the heavy equipment industry.
<br />
Being that we have taken an interest in supporting our industry&#8217;s profession and needs, it would sure be nice to 
</p>
<p>
have those with influence assist us with grants and support, too. As I stated, I am all for promoting the needs for 
</p>
<p>
college-educated young people. My three children all attend college. Of course, I am very proud of them. I just 
</p>
<p>
hope there are still enough skilled persons in the trades for my children to supervise and design for in the very 
</p>
<p>
near future.&nbsp;
</p>]]></content:encoded>
      <dc:date>2008-05-01T05:01:00-05:00</dc:date>
    </item>

    <item>
      <title>GMU economist expects a stronger economy by the third quarter</title>
      <link>http://www.virginiabusiness.com/index.php/section_opinion/article/gmu&#45;economist&#45;expects&#45;a&#45;stronger&#45;economy&#45;by&#45;the&#45;third&#45;quarter/</link>
      <description>Interview</description>
      <dc:subject>Opinion</dc:subject>
      <content:encoded><![CDATA[<p>The economy is showing signs of weakness as businesses and homeowners continue to cope with the fallout from a growing wave of subprime mortgage foreclosures. Virginia Business turned to Dr. Stephen S. Fuller of George Mason University in Fairfax for his insights on the direction of the economy. He is a University Professor and the holder of the Dwight Schar Faculty Chair at GMU and is the director of the Center for Regional Analysis at the university&#8217;s School of Public Policy.
</p>
<p>
How would you describe the current condition of the economy?
<br />
It is likely that the national economy contracted for the first three months of the year with payroll job losses being registered in each of those months (on a month-to-month basis). When part-time, self-employed and contract workers are included, the number of payroll jobs in March was 480,000 greater than in March 2007. However, the nation had 220,000 fewer total jobs in March 2008 than in March 2007, thus registering its first decline since mid-2001.&nbsp; Most telling is the increase in first-time claims for unemployment compensation that exceeded 400,000 during the last week of March.&nbsp; So, yes, the economy is experiencing recession-like conditions.&nbsp; 
<br />
It is unclear whether this pattern will extend for a second quarter, and a recession be declared.&nbsp; The second quarter&#8217;s economic performance is likely to be very weak.&nbsp; If consumers spend their tax refunds and their stimulus checks rather than paying down their debt, and energy prices moderate and new residential construction ticks up slightly, the national economy could turn positive before midyear and avoid the recession label.&nbsp; Consumer confidence, which stands at a low not seen since the early 1970s during the oil embargo, needs to improve and consumer and business spending need to increase in order to escape a recession in 2008.&nbsp; 
<br />
 
<br />
Do you think proposals to revamp the financial regulatory system will prevent future credit crises?
<br />
Better oversight of the financial markets, especially the Wall Street banks and mortgage companies, would go a long way to protect against future credit crises similar to the one we are now in.&nbsp; And, I believe we will see a tightening of this oversight with the Federal Reserve Bank taking the lead, at least initially.&nbsp; Changes to the regulatory system within the executive branch will be more difficult to achieve as these will require congressional action, and there is no consensus between Congress and the administration, and it is an election year. Still, in the past, when the credit system experienced a meltdown, such as during the S&amp;L crisis in 1987, important changes have been implemented that corrected those abuses.
<br />
 
<br />
Would?a bailout for consumers with subprime mortgages help or hurt the economy?
<br />
First, a bailout of homeowners with subprime mortgages would be extremely expensive.&nbsp; The federal government cannot afford such a bailout (the federal deficit is already too big) nor can the financial institutions. Doing nothing also presents a major threat to the economy. 
<br />
There are feasible and affordable proposals that would help homeowners in danger of losing their homes to foreclosure to refinance their variable-rate mortgages before they&#8217;re set to an unaffordable rate. The cost of refinancing these qualified loans would be small compared with the cost of letting these units slip into foreclosure. With financial counseling and specific performance checkpoints, homeowners with sufficient cash flow to carry a conventional mortgage in place of the flawed subprime could be saved and the threatened foreclosure problem significantly reduced. Still, the number of foreclosed units will continue to grow this year and that growth threatens the normalization of the housing market.&nbsp; Tax incentives to encourage increased homeownership have had a positive effect in the past and should be adopted now in order to help find buyers for these foreclosed houses before the problem infects entire neighborhoods.&nbsp;  
<br />
 
<br />
Do you expect the economy stimulus package passed by Congress to be much of a factor?
<br />
The stimulus package will have little beneficial impact on the economy&#8217;s performance. We will see some increase in retail spending during the second quarter as a result of normal tax refunds as the 2007 tax season winds down and some gains in spending during the third quarter as a result of the stimulus checks. A substantial percentage of these funds may be diverted from consumer spending as some will be used to pay off bills and reduce debt load. 
<br />
The one part of the stimulus package that will be beneficial is the raising of the conventional mortgage limits from the previous limit of $417,000 to a maximum of $729,000 in high-price regions.&nbsp; 
</p>
<p>
How do you expect Virginia to weather the?slowdown?
<br />
The Virginia economy has stronger fundamentals than the national economy, and its housing problems are not as great.&nbsp; Consequently, I expect the Virginia economy to grow over the course of the year albeit at a much slower rate than in 2007.&nbsp; I will be surprised if the state actually experiences two consecutive quarters of negative economic performance so I am still expecting it to escape the recession altogether.&nbsp; This is not to say that there are not counties or submarkets across the state that will experience contraction.&nbsp; The economic and housing problems we are experiencing are not evenly distributed across the state or the nation. Looking forward, I expect the second half of the year to be measurably stronger than the first half and for this reacceleration of the state&#8217;s economy to extend through 2009 and be even stronger in 2010.
<br />
 
<br />
When do you expect the economy to revive?
<br />
I believe the third quarter will be the beginning of a clear uptick in the economy at both the national and state levels. I expect the first quarter to have been the worst (negative nationally and possibly just very slow in Virginia) and the second quarter to be stronger. By the third quarter, there should be visible signs of a stronger economy.&nbsp; Renewed growth will slowly accelerate in 2009 with 2010 projected to register a solid gain for both the state and the nation.&nbsp; 
</p>
]]></content:encoded>
      <dc:date>2008-05-01T05:01:00-05:00</dc:date>
    </item>

    <item>
      <title>When is an executive coach right for your organization?</title>
      <link>http://www.virginiabusiness.com/index.php/section_opinion/article/when&#45;is&#45;an&#45;executive&#45;coach&#45;right&#45;for&#45;your&#45;organization/</link>
      <description>As a manager, improving employee performance can be challenging</description>
      <dc:subject>Opinion, Columnists</dc:subject>
      <content:encoded><![CDATA[<p><i></i>As a manager, improving employee performance can be challenging.&nbsp; If only you could replicate yourself, you could accomplish more work.&nbsp; If part of your role is to develop employees, and you have been considering whether an executive coach is right for your organization, this article should help you decide.
</p>
<p>
Executive coaching has emerged in recent years as a powerful and popular method to develop leadership skills.&nbsp; Recent surveys of Fortune 500 companies show leadership coaching consistently delivers value in several situations.&nbsp; When managers discuss an employee&#8217;s performance, it is usually because the performance is either very good or very poor.&nbsp; Ironically, these are also the two most common situations where coaches are used.&nbsp; 
</p>
<p>
An organization will rely on the skills of an executive coach when they need to get a high performer up to speed quickly.&nbsp; The coach helps identify specific competencies that the organization feels are important for the role and assesses the high performer&#8217;s skill level against those competencies.&nbsp; Coaching can be very effective when used in this manner.&nbsp; Specifically, it:
</p>
<p>
1.	allows the individual to gain an understanding of the skills needing focus or further improvement for strategic success
<br />
2.	reinforces the individual&#8217;s belief that the company values him and is willing to invest time and resources in his development
<br />
 
<br />
In the second scenario, a coach can be utilized for an employee who is not performing well, and the company wants to give the person a final chance to improve her performance.&nbsp; In this case, coaching will work only when the employee:
</p>
<p>
1.	is motivated to make a change in behavior
<br />
2.	feels positive about the company&#8217;s willingness to take the time to invest in the development of her skills
<br />
There may be other equally important reasons to engage a coach.&nbsp; According to Doug Silsbee, author of &#8220;The Mindful Coach:&#8221; &#8220;Life&#8217;s challenges provide great opportunities to learn and grow. Engaging in a coaching partnership allows you to make the most of these opportunities, finding greater freedom and real choices in challenging times.&#8221;  He suggests that managers consider the use of coaching during periods of transition, development, change and renewal including:
<br />
&#8226;	A promotion or challenging new assignment 
<br />
&#8226;	Planning or implementing career change 
<br />
&#8226;	Building new capacities and approaches 
<br />
&#8226;	Business growth and changes 
<br />
&#8226;	Personal transitions related to relationships, geographic moves and loss 
<br />
&#8226;	The need for renewal or better life balance 
<br />
&#8226;	Developing your authentic leadership style 
<br />
&#8226;	Personal resilience during stress and change
</p>
<p>
Regardless of which scenario you find your employee in, a good executive coach should:
</p>
<p>
&#8226;	Help the employee choose the right skill-building activities through the use of accurate assessment tools
<br />
&#8226;	Hold the employee accountable to learning skills to improve the competencies
<br />
&#8226;	Routinely schedule review meetings
<br />
&#8226;	Encourage the employee if setbacks are encountered
<br />
&#8226;	Recognize and celebrate accomplishments 
<br />
&#8226;	Provide helpful advice
<br />
&#8226;	Be honest and direct with the employee
</p>
<p>
Your responsibility as a manager is to help determine when the situation calls for an executive coach and whether that coach should be external or internal.&nbsp; You should consult your Human Resources department first to understand what resources are already available.
</p>
<p>
An internal coach from the company is tasked with creating a mentoring relationship with the employee.&nbsp; HR can help make this match (software is available to accomplish this easily). HR can also help find an external coach who is properly matched the employee.
</p>
<p>
Determining whether to use an internal or external resource depends on several criteria including:
<br />
&#8226;	Internal coach availability
<br />
&#8226;	The skill set possessed by the internal coach
<br />
&#8226;	Length of time available to improve individual&#8217;s skill level
<br />
&#8226;	Funding 
</p>
<p>
Once you have assessed the individual&#8217;s motivation to change and your company&#8217;s development resources, then you can determine whether an internal or external coach is best for your employee. After you have established the coaching arrangement, you and your HR manager should monitor the relationship.&nbsp; However, you should remember that the employee&#8217;s success is not solely determined by picking the perfect coach, but rather by the employee taking responsibility for her own development and change in behavior.
</p>
<p>
Genevieve Roberts is managing principal at Richmond-based Titan Group LLC
<br />

</p>]]></content:encoded>
      <dc:date>2008-04-29T14:50:01-05:00</dc:date>
    </item>

    <item>
      <title>Economic stimulus act creates business incentives</title>
      <link>http://www.virginiabusiness.com/index.php/section_opinion/article/economic&#45;stimulus&#45;act&#45;creates&#45;business&#45;incentives/</link>
      <description>Most press reports on the Economic Stimulus Act of 2008 have focused on taxpayer rebates, but it also includes key business incentives.</description>
      <dc:subject>Opinion, Columnists, Tips on Taxes</dc:subject>
      <content:encoded><![CDATA[<p>Most press reports on the Economic Stimulus Act of 2008 have focused on the $600 tax rebates taxpayers will receive this spring.&nbsp; Less discussed &#8212; but perhaps more important &#8212; are the two business incentives included in the law. 
</p>
<p>
These incentives create almost $50 billion in potential tax savings for businesses. Through these incentives, Congress hopes to encourage businesses to buy new equipment, software and tangible property in 2008 because they allow businesses to decrease their Federal tax liabilities.
</p>
<p>
One incentive is a 50 percent depreciation allowance for 2008 purchases. Under the new law, taxpayers may depreciate 50 percent of the cost of certain property put in service in 2008.&nbsp; Qualifying property includes property which is eligible for depreciation over 20 years or more, water utility property, off-the-shelf computer software and certain leasehold property.&nbsp; This incentive is similar to the special &#8220;bonus&#8221; depreciation previously available for certain property generally placed in service before January 1, 2005.
</p>
<p>
The second incentive is an increase in the deductions businesses may claim for newly purchased depreciable tangible personal property. Under the old law, a business could automatically deduct up to $128,000 of newly purchased business property. Under the new incentive, however, the $128,000 deduction has increased to $250,000.&nbsp; 
</p>
<p>
In addition, the old law began phasing out the benefit of this deduction if the cost of the property exceeded $510,000.&nbsp; Under the new incentive, however, the phase-out does not begin until $800,000. As a result, a business purchasing up to $800,000 of equipment this year would be able to immediately deduct up to $250,000 of its investment, up from $128,000 in 2007.&nbsp;  
</p>
<p>
Although these business incentives have been overshadowed in the news by the tax rebates for individuals and families, these tax breaks for businesses are invaluable in their own right.&nbsp; By making purchases in 2008 rather than deferring them until 2009, even if the economy might dictate a deferral of expenses, your business might come out far ahead after taking tax benefits into account. 
</p>
<p>
<i>Brian Bernhardt is a partner in the Richmond office of McGuireWoods LLP. He practices in the areas of Federal tax controversies, Federal tax litigation, and nonprofit and tax-exempt organizations, focusing on their administrative relationships with the Internal Revenue Service. </i>
</p>
<p>

</p>]]></content:encoded>
      <dc:date>2008-04-01T15:13:00-05:00</dc:date>
    </item>

    <item>
      <title>Green &#8211; It&#8217;s bigger than you think</title>
      <link>http://www.virginiabusiness.com/index.php/section_opinion/article/green&#45;its&#45;bigger&#45;than&#45;you&#45;think/</link>
      <description>Our View</description>
      <dc:subject>Opinion, Our View</dc:subject>
      <content:encoded><![CDATA[<p>Just a few years ago, the adjective &#8220;green&#8221; conjured up a batch of politically correct images: Europe&#8217;s Green Party, Greenpeace making the world safe for baby seals, Earth Day and redwood-climbing Californians.
</p>
<p>
Today&#8217;s picture is quite different.&nbsp; Green has gone mainstream.&nbsp; Businesses are increasingly comfortable with environmentally friendly ideas.&nbsp; This makes both political and economic sense.
</p>
<p>
As a baby boomer, it&#8217;s hard not to see generational impacts in most trends.&nbsp; Business leaders who came of age in the &#8216;60s now have the chance to approve sustainable design features for new corporate structures.
</p>
<p>
At the same time, a new generation of employees expects global stewardship.
</p>
<p>
Municipal recycling programs are widespread.&nbsp; Aluminum recycling is replacing bauxite mining. 
</p>
<p>
It seems like only months ago that global warming was debatable. Now it&#8217;s accepted as fact.&nbsp; In some countries, factory emissions are already controlled by marketable carbon exchange permits.
</p>
<p>
Environmentally sustainable business practices are common supply-chain requirements.&nbsp; In a global economy, these trends already affect Virginia.
</p>
<p>
What&#8217;s missing in the dialogue?&nbsp; It&#8217;s the same thing most often missing in partisan politics &#8212; a middle ground of compromise and collaboration.
</p>
<p>
Sustainable practices don&#8217;t mean going back to living around the campfire.&nbsp; Parts of the Third World are already largely deforested without experiencing the conveniences of modern living.&nbsp;  Nor do sustainable practices mean disregarding environmental impacts.&nbsp; Problems that are here now cannot be abated by leaving them for future generations.
</p>
<p>
Take, for example, nuclear energy.&nbsp; Many environmentalists see nuclear power as the ultimate evil.&nbsp; Despite a near -perfect safety record in this country (the Three-Mile Island accident in 1979 was entirely contained within the facility), there have been no new nuclear construction permits issued in the U.S. for more than 30 years.&nbsp; Today,  
<br />
there are seven applications on file for new reactors, including one in Virginia.
</p>
<p>
Virginia&#8217;s existing nuclear facilities provide 29 percent of the state&#8217;s electrical energy. That&#8217;s more than most people realize, and it&#8217;s being done with technology and a capital infrastructure that is more than 30 years old.&nbsp; New plants will be even safer and built to more efficient standards.
</p>
<p>
Nuclear waste disposal, of course, remains a political hot potato for the nuclear industry. Meanwhile, carbon emissions from the majority of other power sources, not to mention automobiles, go largely uncaptured. They do far more harm than nuclear, which is about as close as science has been able to bring us to clean energy.
</p>
<p>
Coal is another example.&nbsp; Though coal is largely vilified as the major source of greenhouse emissions, newer and cleaner technologies, such as coal-to-liquid and carbon sequestration, hold great promise.
</p>
<p>
It is wrong to rule out nuclear and clean-coal technologies.&nbsp; The U.S. military is the world&#8217;s largest consumer of foreign oil. (What does that mean for our international security?)
</p>
<p>
Aviation fuel alone accounts for 58 percent of the Department of Defense&#8217;s total energy cost.&nbsp; The U.S. Air Force has committed to sourcing 50 percent of its continental U.S. fuel from coal-to-liquid blends by 2016.
</p>
<p>
If the world&#8217;s largest oil consumer has this level of commitment, surely there are business opportunities in Virginia to help supply clean-energy solutions.
</p>
<p>
States such as West Virginia, Kentucky and Ohio are making major investments in clean-energy development.&nbsp; Virginia should follow their example.
</p>
<p>
So what does it mean to be green?&nbsp; We are well past the days of tree-hugging generalizations.
</p>
<p>
Like most complex problems, environmental solutions make strange bedfellows.&nbsp; Energy and environmental lobbyists need to work together.&nbsp; Government, the military, universities, technologists and businesses all stand to benefit from being partners in the creation of new solutions.
</p>
<p>
Green is a business opportunity for Virginia that can benefit many sectors of our economy.&nbsp; It&#8217;s bigger than you think.&nbsp; 
</p>
]]></content:encoded>
      <dc:date>2008-04-01T05:01:00-05:00</dc:date>
    </item>

    <item>
      <title>Downtown master plan returns city to timeless tradition</title>
      <link>http://www.virginiabusiness.com/index.php/section_opinion/article/downtown&#45;master&#45;plan&#45;returns&#45;city&#45;to&#45;timeless&#45;tradition/</link>
      <description>Commentary and Analysis</description>
      <dc:subject>Opinion, Viewpoints</dc:subject>
      <content:encoded><![CDATA[<p>Until the advent of the auto age about 100 years ago,  the imperative for developers was to make people happy. This tradition led to design that was pedestrian-oriented, human-scaled, compact and ornamental.
</p>
<p>
Since that time, however, the focus has changed. Development is now oriented toward making cars, not people, happy. Because car-based design nearly always creates barriers for other types of travel, it creates a growing, self-perpetuating vicious cycle. After decades of using this car-oriented model, we now find that it is nearly impossible to go anywhere without a car. 
</p>
<p>
Yet the terrible tragedy is this: Cars and people have vastly different needs. Cars require wide, high-speed highways and enormous parking lots (preferably in front of buildings). When not in cars, people are repelled by such design. But because of our dependence on autos, almost all of us are compelled to become our own worst enemies, calling for development that makes car travel easier.
</p>
<p>
Unintentionally, then, our quality of life is in a downward spiral of our own making, as the car-oriented world we&#8217;ve advocated has created an increasingly unpleasant community. As we expand our communities for cars, the world for people shrinks.
</p>
<p>
Downtown Richmond, like downtowns across America, has suffered from this problem. After working as a senior city planner in Florida for 20 years, I recently relocated to Richmond and was immediately struck by what has happened to downtown. Vast amounts of downtown now consist of deadening, sterilizing off-street surface parking, and massive, high-speed highways.
</p>
<p>
To be healthy, a downtown needs to build on its competitive strengths: compact, walkable, charming, romantic design. A crucial aspect of this is leveraging &#8220;agglomeration economies.&#8221; That is, a healthy downtown benefits from a compact concentration of offices, retail, civic buildings and residences.
</p>
<p>
Yet our single-minded efforts to facilitate our cars is a powerful dispersant. Offices, shops, government buildings and homes scatter to outlying areas, leaving an abandoned, scary, unhealthy downtown.
</p>
<p>
Because a person in a car consumes 19 times as much space as a person in a chair, cars devour an enormous amount of space, which subverts the walkable compactness that downtown needs. The resulting &#8220;gigantism&#8221; (huge parking lots, monster highways, endless sprawl) has undercut the livability of downtown Richmond.
</p>
<p>
The key for a revitalized downtown is to return to the timeless tradition that was abandoned a century ago. Richmond is therefore fortunate to have hired Dover, Kohl and Partners to prepare an update to its downtown master plan.&nbsp; This firm is nationally celebrated for skillfully restoring this compact, walkable tradition.
</p>
<p>
Dover Kohl&#8217;s plan for downtown Richmond contains essential recommendations: Convert most one-way streets to two-way operation. Reduce the stifling dominance of off-street surface parking. Emphasize buildings and density that activate the streets and sidewalks. Small (and slow) is beautiful.
</p>
<p>
Not coincidentally, the recent Crupi Report assessing Richmond&#8217;s future reaches similar conclusions: &#8220;focus on &#8230; walkable, two-way streets &#8230; human scale &#8230; people-friendly &#8230; [design].&#8221; 
</p>
<p>
The report cites Shockoe Slip and Shockoe Bottom as good starting points: &#8220;space that brings people together &#8230;construction using traditional design &#8230; charm and sense of place that comes with more classical architecture.&#8221;
</p>
<p>
Downtown Richmond is rich in history and should leverage that asset by retaining and celebrating its ornamental, historic buildings. City officials also should consider restoring some of its cobblestone and brick streets &#8212; an excellent way to induce civic pride.
</p>
<p>
In my work, I have come to learn that quality of life is a powerful economic engine. Downtown Richmond should take advantage of this by returning to the tradition of designing for people, not cars. 
</p>
<p>
The Dover Kohl Downtown Master Plan is an excellent place to start.&nbsp; 
<br />

</p>]]></content:encoded>
      <dc:date>2008-04-01T05:01:00-05:00</dc:date>
    </item>

    <item>
      <title>Surviving a leveraged buyout</title>
      <link>http://www.virginiabusiness.com/index.php/section_opinion/article/surviving&#45;a&#45;leveraged&#45;buyout/</link>
      <description>Special rules govern common exit strategy structure for closely held businesses</description>
      <dc:subject>Opinion, Columnists, Legal Affairs</dc:subject>
      <content:encoded><![CDATA[<img src="http://www.virginiabusiness.com/images/uploads/peter.jpg" border="01" alt="image" class="photoborder" width="100" height="139" /p aling= left>

<br>A few decades ago, leveraged buyouts (LBOs) were popular structures for a number of well-publicized, publicly held companies that &#8220;went private.&#8221; Although the term conjures images of corporate raiders, Wall Street espionage and board room battles, an LBO can be an effective exit strategy for the owners of closely held businesses looking to cash in on shareholder value and provide an ownership opportunity for key members of management who have contributed to the organization&#8217;s success.In general, there are four methods of accomplishing an LBO:</br>

<br>- Within the targeted company &#8211; the company repurchases and retires the founder&#8217;s interest with borrowed money or accumulated assets</br>
<br>- Amongst the shareholders &#8211; existing minority shareholders individually acquire a majority position directly from the founder</br>
<br>- Through an existing company with substantive operations &#8211; a competitor or peer buys out the founder</br>
<br>- Through the creation of a holding company &#8211; outside investors capitalize a shell company that acquires the targeted majority interest</br>

<br>Creating a shell or holding company to house the transaction is generally the preferred type of LBO because outside investors often provide a significant source of capital to complete the deal. Further, the outside investor can segregate contingent liabilities while establishing a structure under which additional investments can be made.</br>

<br>The creation of a new company in its simplest terms, an LBO accomplished through the creation of a holding company requires two steps. First, a holding or shell company is organized and capitalized by the continuing shareholders through the issuance of stock (frequently with preferential rights) and debt. Second, the proceeds of the stock issuance and debt funding are used to acquire all or a portion of the founder&#8217;s equity interest in the targeted company.</br>

<br>To illustrate, assume that Old Co. was founded by Adam, the original and sole shareholder. Through the years, Brian, Old Co.&#8217;s CFO, and Chuck, the company&#8217;s Chief Operations Officer have contributed greatly to the company's growth and success and made Adam independently wealthy. Adam desires to pursue other interests and decides to sell his interest.</br>

<br>The book value of Adam&#8217;s equity is $2 million. He believes the fair value of Old Co. is $3 million due in part to its trademark, which is independently valued at $250,000. Brian and Chuck wish to continue the enterprise and solicit Delta Capital, an outside investment firm, to provide financing to purchase Adam&#8217;s interest. Together, Brian, Chuck and Delta Capital form New Co. with capital contributions of $200,000 each, for a total of $600,000. New Co. also obtains additional financing of $2.4 million from a bank and acquires Adam&#8217;s interest at the negotiated purchase price of $3 million. </br>

<br>Accounting for the transaction</br>

<br>For the most part, U.S. generally accepted accounting principles (&#8220;GAAP&#8221;) require business combinations to be accounted for by the acquisition method described in Statement of Financial Accounting Standards (&#8220;SFAS&#8221;) 141 &#8211; Business Combinations, as amended.</br>

<br>The acquisition method requires the surviving entity of a business combination to record the assets and liabilities of the acquired entity at the full fair value of the assets and liabilities acquired. The purchase price paid in excess of the full fair value of the net assets acquired is reported as goodwill as demonstrated in the following formula:</br>


<br>Purchase price - Fair value of net assets acquired = Goodwill<br>

<br>In the example described, the investment stemming from the arm's length transaction reflects the fair value of the company, which differs from Old Co.&#8217;s equity by the $1 million appreciation in net assets. If Old Co. is retained as a subsidiary, that excess should be pushed down to it because of the complete change in ownership. Old Co.&#8217;s books account for the push down by adjusting the appropriate assets and liabilities through additional paid-in capital.</br>

<br>The adjustment reflects the individual assets and liabilities at their fair value (including the initial recognition of the marketing-related intangible assets for the trademark). Any excess of the $1 million over the adjustments to individual assets and liabilities is recorded as goodwill. In addition, New Co.&#8217;s debt of $2.4 million should also be pushed down by a debit to an inter-company account and a credit to debt.</br>

<br>In applying the accounting guidance to the illustration described above, New Co.&#8217;s balance sheet evolves as follows (income tax effects have been ignored for the sake of simplicity):</br>
<table width="873" height="473" border="1">
  <tr>
    <td width="158"><h1>New    Co. (unconsolidated)</h1></td>
    <td width="128"><h1>Pre-acquisition</h1></td>
    <td width="135"><h1>Step 1</h1></td>
    <td width="158"><h1>Step 2</h1></td>
    <td width="117"><h1>Step 3</h1></td>
    <td width="137"><h1>Ending Balance</h1></td>
  </tr>
  <tr>
    <td><h2>Assets</h2></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td><p align="left">Current    assets</p></td>
    <td><p align="left">$-</p></td>
    <td><p align="left">$3,000,000 </p></td>
    <td><p align="left" class="style1">($3,000,000)</p></td>
    <td><p align="left">$-</p></td>
    <td><p align="left">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</p></td>
  </tr>
  <tr>
    <td>Investment    in Old Co</td>
    <td>-</td>
    <td>-</td>
    <td>3,000,000</td>
    <td>-</td>
    <td>3,000,000</td>
  </tr>
  <tr>
    <td><strong>Total    assets</strong></td>
    <td>$-</td>
    <td><strong>$3,000,000 </strong></td>
    <td>$-</td>
    <td>$-</td>
    <td><strong>$3,000,000 </strong></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td><h2>Liabilities    and Equity</h2></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>Due    to Old Co.</td>
    <td>$-</td>
    <td>$-</td>
    <td>$-</td>
    <td>$2,400,000 </td>
    <td>$2,400,000 </td>
  </tr>
  <tr>
    <td>Debt</td>
    <td>-</td>
    <td>2,400,000</td>
    <td>-</td>
    <td>-2,400,000</td>
    <td>-</td>
  </tr>
  <tr>
    <td>Equity</td>
    <td>-</td>
    <td>600,000</td>
    <td>-</td>
    <td>-</td>
    <td>600,000</td>
  </tr>
  <tr>
    <td><strong>Total    liabilities and equity</strong></td>
    <td>$-</td>
    <td><strong>$3,000,000 </strong></td>
    <td>$-</td>
    <td>$-</td>
    <td><strong>$3,000,000 </strong></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
</table>

As a result, the subsidiary will reflect stockholder&#8217;s equity of $3 million.

<table width="858" border="1" cellpadding="1">
  <tr>
    <td width="128" height="39"><h2><strong>Old    Co.</strong></h2></td>
    <td width="118"><h2><strong>Pre-acquisition</strong></h2></td>
    <td width="123"><h2><strong>Step 1</strong></h2></td>
    <td width="123"><h2><strong>Step 2</strong></h2></td>
    <td width="123"><h2><strong>Step 3</strong></h2></td>
    <td width="203"><h2><strong>Ending Balance</strong></h2></td>
  </tr>
  <tr>
    <td><h3>Assets</h3>
    <p>&nbsp;</p></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>Current assets</td>
    <td>$4,000,000 </td>
    <td>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</td>
    <td>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</td>
    <td>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</td>
    <td>$4,000,000 </td>
  </tr>
  <tr>
    <td>&nbsp;Property and equipment</td>
    <td>1,000,000</td>
    <td>-</td>
    <td>-</td>
    <td>-</td>
    <td>1,000,000</td>
  </tr>
  <tr>
    <td>&nbsp;Intangible assets</td>
    <td>-</td>
    <td>-</td>
    <td>-</td>
    <td>250,000</td>
    <td>250,000</td>
  </tr>
  <tr>
    <td>&nbsp;Goodwill</td>
    <td>-</td>
    <td>-</td>
    <td>-</td>
    <td>750,000</td>
    <td>750,000</td>
  </tr>
  <tr>
    <td>Due from New Co.</td>
    <td>-</td>
    <td>&nbsp;</td>
    <td>-</td>
    <td>2,400,000</td>
    <td>2,400,000</td>
  </tr>
  <tr>
    <td><strong>Total    assets</strong></td>
    <td><strong>$5,000,000 </strong></td>
    <td><strong>$-</strong></td>
    <td><strong>$-</strong></td>
    <td><strong>$3,400,000 </strong></td>
    <td><strong>$8,400,000</strong></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td><h3>Liabilities    and Equity</h3></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>Current    liabilities</td>
    <td>$3,000,000 </td>
    <td>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</td>
    <td>-</td>
    <td>-</td>
    <td>$3,000,000 </td>
  </tr>
  <tr>
    <td>Debt</td>
    <td>-</td>
    <td>-</td>
    <td>&nbsp;</td>
    <td>2,400,000</td>
    <td>2,400,000</td>
  </tr>
  <tr>
    <td>Equity</td>
    <td>2,000,000</td>
    <td>-</td>
    <td>-</td>
    <td>1,000,000</td>
    <td>3,000,000</td>
  </tr>
  <tr>
    <td><strong>Total    liabilities and equity</strong></td>
    <td><strong>$5,000,000 </strong></td>
    <td><strong>$-</strong></td>
    <td><strong>$-</strong></td>
    <td><strong>$3,400,000</strong></td>
    <td><strong>$8,400,000 </strong></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
</table>


<br>Step 1 &#8211; Shareholders capitalize New Co. with capital contributions and new debt
Step 2 &#8211; New Co. purchases all of the outstanding shares of Old Co. from Adam
Step 3 &#8211; New Co.&#8217;s debt is pushed down to Old Co., Old Co.&#8217;s assets are adjusted to fair value and Old Co. records goodwill for the excess of the purchase price over the fair value of its assets.</br>

<br>Because the $3 million equals New Co.&#8217;s equity in the transaction, if consolidated financial statements are presented, a consolidation entry would be made to eliminate the investment of $3 million and the subsidiary&#8217;s debt and equity, as demonstrated below:</br>
<table width="923" border="1" cellpadding="1">
  <tr>
    <td width="211"><h2>New Co. and Subsidiary</h2></td>
    <td width="87"><h2>New Co.</h2></td>
    <td width="94"><h2>Old Co.</h2></td>
    <td width="87"><h2>Total</h2></td>
    <td width="177"><h2>Eliminations</h2></td>
    <td width="227"><h2>Consolidated Balance</h2></td>
  </tr>
  <tr>
    <td><h3>Assets</h3></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>Current    assets</td>
    <td>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</td>
    <td>$4,000,000</td>
    <td>$4,000,000</td>
    <td>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</td>
    <td>$4,000,000</td>
  </tr>
  <tr>
    <td height="25">Property    and equipment</td>
    <td>-</td>
    <td>1,000,000</td>
    <td>1,000,000</td>
    <td>-</td>
    <td>1,000,000</td>
  </tr>
  <tr>
    <td>Investment    in Old Co.</td>
    <td>3,000,000</td>
    <td>-</td>
    <td>3,000,000</td>
    <td>-3,000,000</td>
    <td>-</td>
  </tr>
  <tr>
    <td>Intangible    assets</td>
    <td>-</td>
    <td>250,000</td>
    <td>250,000</td>
    <td>-</td>
    <td>250,000</td>
  </tr>
  <tr>
    <td>Goodwill</td>
    <td>-</td>
    <td>750,000</td>
    <td>750,000</td>
    <td>-</td>
    <td>750,000</td>
  </tr>
  <tr>
    <td>Due    from New Co.</td>
    <td>-</td>
    <td>2,400,000</td>
    <td>2,400,000</td>
    <td>-2,400,000</td>
    <td>-</td>
  </tr>
  <tr>
    <td><strong>Total    assets</strong></td>
    <td><strong>$3,000,000 </strong></td>
    <td><strong>$8,400,000</strong></td>
    <td><strong>$11,400,000</strong></td>
    <td><strong>$5,400,000 </strong></td>
    <td><strong>$6,000,000</strong> </td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td><h3>Liabilities    and Equity</h3></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>Current    liabilities</td>
    <td>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</td>
    <td>$3,000,000 </td>
    <td>$3,000,000</td>
    <td>-</td>
    <td>$3,000,000 </td>
  </tr>
  <tr>
    <td>Due    to Old Co.</td>
    <td>2,400,000</td>
    <td>-</td>
    <td>2,400,000</td>
    <td>-2,400,000</td>
    <td>-</td>
  </tr>
  <tr>
    <td>Debt</td>
    <td>-</td>
    <td>2,400,000</td>
    <td>2,400,000</td>
    <td>-</td>
    <td>2,400,000</td>
  </tr>
  <tr>
    <td>Equity</td>
    <td>600,000</td>
    <td>3,000,000</td>
    <td>3,600,000</td>
    <td>-3,000,000</td>
    <td>600,000</td>
  </tr>
  <tr>
    <td><strong>Total    liabilities and equity</strong></td>
    <td><strong>$3,000,000</strong> </td>
    <td><strong>$8,400,000</strong></td>
    <td><strong>$11,400,000</strong></td>
    <td><strong>$3,400,000 </strong></td>
    <td><strong>$6,000,000 </strong></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
</table>


<br>The end result of the consolidated entity displays the true economics of the transaction, and reports the assets and equity of the entity at their determined fair values.</br>

<br>Conclusion</br>
<br>The leveraged buyout transaction introduces unusual accounting entries that many surviving executives are not accustom to seeing. Understanding how the balance sheet of a newly formed holding entity develops can help new stakeholders understand how the financial reporting of their enterprise presents the underlying economics of their ventures.</br>]]></content:encoded>
      <dc:date>2008-03-21T21:39:00-05:00</dc:date>
    </item>

    
    </channel>
</rss>