Michael F. O’Connor
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Mike is an Affiliate of Credibility International and a Managing Member of Natoma Partners, LLC. He has over 24 years of experience providing forensic accounting, litigation, and regulatory consulting services to clients in a variety of industries including communications, utilities, insurance, transportation, and manufacturing. He has also managed audits of large public companies regulated by the SEC. Mike’s experience includes assisting clients with investigations, restatements, due diligence, data analytics, purchase price disputes, complex accounting, and financial reporting matters. He has directly interfaced with the SEC and the FCC to resolve clients’ issues. Mike has also served as an expert witness.
Prior to founding Natoma Partners, Mike was a founding managing director at Huron Consulting Group and prior to that a partner in Arthur Andersen’s economic and financial consulting group where he focused on complex accounting, regulatory, and litigation matters. Mike also spent two years as the controller for the law firm of Sonnenschein Nath & Rosenthal.
Investigations and Restatements
Mike has performed investigations involving alleged accounting errors and irregularities contained in the financial statements of public companies. These assignments have often been conducted as part of a restatement of prior period financial results. Mike has provided forensic and technical accounting as well as overall project management services to outside counsel, special committees of the board, and management in connection with these matters. The following are representative of Mike’s investigation and restatement experience:
- Led a large team that provided extensive accounting and SOX 404 remediation consulting services to management in connection with a Fortune 500 registrant’s multi-year restatement of its prior period financial results filed with the SEC.
- Provided assistance to legal counsel in a special investigation of financial reporting issues at one of the world’s largest financial services firms in connection with the restatement of its prior period results. The work included forensic and investigative accounting, interpretations of GAAP, financial modeling, and computer forensic services.
- Analyzed a public registrant’s software revenue recognition accounting in connection with a multi-year restatement of prior period financial results filed with the SEC as a result of a merger accounted for as a reverse acquisition.
- Performed an analysis of a public registrants accounting for acquisitions and restructuring charges in connection with the restatement of is prior period financial results filed with the SEC.
Mike has been involved in a wide range of litigation matters throughout his career. These disputes have included class action, breach of contract, trade secrets, tax, and regulatory related matters. The following matters are representative of Mike’s litigation experience:
- Performed extensive litigation support work and was a named expert for two wireless affiliates of a major PCS carrier in connection with a breach of contract dispute.
- Analyzed a major airline’s accounting for maintenance expenditures and developed an expert report in connection with a Securities Act of 1934 case.
- Served as an expert witness for an insurance broker in connection with a dispute involving the use of customer lists.
- Prepared an expert report in response to plaintiff’s purported lost profits in connection with a breach of contract dispute involving patents to produce certain metal alloys.
- Led a team of forensic accountants and information technology specialists on behalf of a large homeowner’s insurance class action case on behalf of a Fortune 500 insurance carrier in connection with the 1994 Northridge, California earthquake.
- Prepared an expert report filed in the U.S. District Court, Eastern District of Michigan related to both accounting and forward-looking economic costs of providing local telephone voice services.
- Developed multiple damage scenarios for various billing systems in connection with a large telecommunications carrier’s Y2K insurance claim.
- Led an engagement team that assisted several carriers in the automobile insurance industry in their defense against class action claimants.
- Prepared an analysis of the foreign currency impacts on inventory and cost of goods sold on behalf of an international manufacturer of herbal products and supplements in connection with an IRS criminal matter.
Due Diligence and Purchase Price Disputes
Mike has worked on a number of transactions over the course of his career. This work has consisted of pre-closing due diligence involving the assessment of the target’s financial position and its historical operations as well as analyzing forecasts used to value the transaction. Mike has also been involved in a number of post-closing purchase price dispute arbitrations often involving working capital, reps and warranties, and the application of generally accepted accounting principles. The following matters are representative of Mike’s experience in this area:
- Provided extensive accounting and forensic analysis services, including expert report development, to a manufacturer of residential and commercial products in connection with a purchase price dispute arising out of bankruptcy.
- Analyzed an internet service provider’s historic and prospective financial information on behalf of the acquiring telecommunications company’s due diligence process.
- Supported the arbitrator in all aspects of a working capital related purchase price dispute involving aircraft services companies.
- Performed due diligence procedures on a diesel systems manufacturing company on behalf of the purchasing company.
- Provided extensive accounting analysis services including expert report development to a utility holding company in connection with a purchase price dispute related to the sale of its natural gas exploration company.
- Provided regulatory accounting related services to a private equity firm in connection with a post-closing purchase price dispute related to the sale of an electric utility company.
- Analyzed the accounting implications and earn-out provisions in connection with the client’s purchase of a cement mixer manufacturing company.
Regulatory – Telecommunications and Utilities
Mike has spent a large portion of his career working on matters involving telecommunications carriers and utilities. These matters include rate cases, regulatory accounting, GAAP, cost accounting, and regulatory compliance related issues. The following matters are representative of Mike’s experience:
- Analyzed a large New York local exchange carrier’s cost of service and rate base five year forecast in connection with a New York Public Service Commission proceeding.
- Provided assistance to a Midwest electric utility in connection with the filing of its historic test year rate case before the Minnesota Public Utilities Commission. The work included defining the filing requirements and a detailed review of the fixed, known and measurable pro forma adjustments as well as expert report development and support.
- Performed a detailed analysis of a major California electric and gas utility’s contributions in aid of construction activity.
- Developed expert testimony on behalf of several electric utilities in connection with regulatory proceedings related to the adoption of FAS 106, Employer’s Accounting for Post-Retirement Benefits Other Than Pensions.
- Provided regulatory consulting and witness support services in numerous state jurisdictional proceedings including Florida, Illinois, Indiana, Michigan, Minnesota, New York, Ohio, Pennsylvania, South Dakota, Texas, and Wisconsin. This included the development of testimony and support in connection with holding company cost allocations to regulated operating companies.
- Performed various analyses of a Regional Bell Holding Company’s (RBOC) joint and common costs associated with the provision of retail and wholesale wireline services. These costs were identified and attributed to the company’s products and services, including unbundled network elements, in accordance with the Telecommunications Act of 1996 (the Act) and the specific costing and pricing provisions contained in the FCC First Report and Order in CC Docket No. 96-98 to implement the local competition provisions of the Act. This work included presentations to the FCC and multiple state public utility commissions as well as the preparation of expert testimony and witness support.
- Worked closely with a major local telecommunications carrier’s management to prepare for multiple Illinois Commerce Commission audits in connection with network infrastructure investment merger condition requirements. We worked with the company personnel to gather, organize, verify, and reconcile infrastructure spending supporting documentation. In addition, we managed the data request process including the retrieval of information and the development of analyses to resolve accounting, documentation, and physical verification related inquiries.
- Provided litigation support and forensic accounting services to a major local telecommunications carrier in connection with a joint pole use agreement. The dispute related to significant pole rental rate increases instituted by the electric utility. Our work included analysis of the electric utility’s cost calculations and the development of adjustments to the utility’s annual pole rental calculations based on the terms contained in the joint pole use agreement, knowledge of the FERC chart of accounts, and review of pertinent FCC orders.
- Assisted in the development and support of a flexible PC based model to provide forecasted test year revenue, expense, and related balance sheet data in support of rate proceedings for a Florida local exchange carrier. This included reviewing the forecast assumptions and data used as inputs to the model, preparation of expert testimony, and witness support.
- Automated, integrated, and simplified a RBOC’s cost study models through an electronic tool. The cost study models reflected the forward-looking economic costing and pricing provisions contained in the FCC Order and were used to develop, among other things, the company’s interconnection rates; pricing for unbundled network elements; resale rates; and, price floors for competitive local services. This tool provided cost analysts the ability to perform sensitivity analysis in a more efficient and effective manner.
- Managed the performance of time and motion studies supporting service pre-ordering, ordering, and provisioning of a RBOC’s unbundled network elements. This work included the development of detailed process flows through coordination of information received from various departments within the RBOC’s network, wholesale, and retail business units. These studies were used to develop non-recurring charges in accordance with the FCC Order.
Audit and Financial Consulting
Mike has performed SEC audits of companies operating in the utilities, telecommunications, and transportation industries. His audit and financial consulting related experience includes the following:
- Provided cost of service and financial planning services to the Panama Canal Commission in connection with the transition of ownership of the Canal from the United States to the Republic of Panama as a result of the 1977 Panama Canal Treaty.
- Served as audit manager for a RBOC and a multi-jurisdictional corporation with operating subsidiaries in the local exchange, electric, cable, and cellular industries.
- Performed cost allocation audits of an independent local exchange carrier’s operating companies in accordance with FCC Order 86-111.
- Analyzed build versus lease assumptions in connection with a large cable television company’s provision of switched telephony services.
- Performed a customer data base reconciliation project on behalf of a provider of security monitoring services in connection with the integration of multiple acquisitions.
- Led a team that created pro forma financial statements filed with the SEC on behalf of a large Class 1 railroad in connection with a leveraged buyout.
- Performed audits of local exchange carriers, wireless carriers, electric utilities, railroads, railcar leasing companies, and governmental entities.
- Analyzed various aircraft purchase and leasing scenarios in connection with the development of a comprehensive forecast used in the refinancing of a major airline’s debt.
Education and professional certifications
- Bachelor of Business Administration, Loyola University of Chicago 1986
- Certified Public Accountant 1986, licensed in Illinois
- Certified in Financial Forensics 2009