Despite the name, liquidity events aren’t just about money

Arnie Burchianti leveraged his health care company, Celtic Healthcare Inc., through a liquidity event. He was looking for long-term patient capital, family money, that would let him run the business as he wished. After Burchianti sold a majority stake to Graham, a holdings company of the family that ran the Washington Post, he used the capital to supercharge his business, under its new name, Graham Healthcare Group. It grew from $30 million to more than $200 million in five years.

To provide insight for others, this deal was dissected at ASPIRE 2018 by:

Arnie Burchianti, Founder
Celtic Healthcare Inc.
(Graham Healthcare Group)

Carly Fagan Barton, Wealth director
BNY Mellon Wealth Management

Francis A. Muracca II, Partner
Jones Day National Tax Practice

John T. Welsh, Vice president, Wealth Strategy
BNY Mellon Wealth Management


There will be surprises

I don’t think a lot of business owners are ready for some of the audibles that may come into play when you are reaching a deal.

—John T. Welsh

In today’s world of due diligence, buyers are putting heavy emphasis on reps and warranties; they’re looking for deeper pockets for claims. There are a number of issues that can arise post-closing — some that you can foresee, others that are completely unknown.

—Francis A. Muracca II


Failure happens more than you think

Fifty percent of the people I spoke to in social environments had a failed exit. There’s no science behind this; this is what I heard — either because of ego, because of greed, because they didn’t plan for it. I heard stories that scared me.

—Arnie Burchianti


Advisers are critical

I wanted an independent group to really hold me accountable to make sure that I was making the right moves, because as an entrepreneur, you just kind of go. So, I flew around and met people. There were people that were highly recommended, and I would walk out of a meeting like, ‘No way in heck am I having that person as an adviser.’

—Arnie Burchianti

That’s where I think the best advisers are. They can take issues off the plate of the owner, but they know what their lane is. They know what they’re supposed to do and get it done, and don’t overstep.

—John T. Welsh

Somebody that may be with you a long time and may have served as a general counsel or an outside lawyer that’s done a great job for you over many, many years, be mindful they may not be the best person to lead the exit strategy. And that’s not with any disrespect to that individual; it’s just a reality in today’s world.

—Francis A. Muracca II


Don’t forget the succession piece

Too many business owners are hoping that their kids will come along and take over the business, and they push them into it. They’re forcing a round peg into a square hole or the opposite therein. That’s just something that leads to disaster because if you’re going along a road that is going to lead to a dead end… When you get down to that dead end, you passed up some of those opportunities that would’ve been open at some point.

—John T. Welsh

What we typically find is that clients are less likely to pay attention to the succession side of the equation. They’re so driven by the liquidity piece, and sometimes you can even have fractured counsel … And if those two pieces aren’t coordinated, you can end up with some really mixed results.

—Francis A. Muracca II



There is nothing more heart-wrenching than seeing a business owner having worked their whole life and not planned well, and the aftermath. And so, I think the common thread here is to plan.

—Carly Fagan Barton

If you’re prepared upfront, if your financial statements are in the right form and if you’ve cleaned up the balance sheet — if you’ve done a lot of things ahead of time, it could mean an additional 5, 7 percent on the purchase price. So, doing your homework really does return the value of the fees you may have otherwise spent.

—Francis A. Muracca II

Half of knowledge is knowing where to find it.

—Arnie Burchianti

Wealth management firms are so used to having business owners who come to the table and say, ‘Well, I was offered this amount of money for my business yesterday. What can I do now?’

—John T. Welsh


Money isn’t everything

Getting the right people around organizations is everything, and governance. It seems to me, in society, it’s getting more and more spreadsheets, and less and less human interaction and focus on what really drives businesses.

—Arnie Burchianti

Ex-Morgan Stanley executive gets prison time in bribery case

NEW YORK, Fri Aug 17, 2012 – A former Morgan Stanley real estate dealmaker was sentenced to nine months in prison on Thursday for skirting the bank’s internal controls in an effort to enrich himself and a Chinese government official.

Garth Peterson, 43, had pleaded guilty in April to conspiring to evade internal accounting controls that Morgan Stanley was required to maintain under the U.S. Foreign Corrupt Practices Act, an anti-bribery law.

Peterson, a managing director in Morgan Stanley’s real estate investment and fund advisory business in Shanghai, was fired in 2008 amid a probe into a suspect real estate deal, court records showed.

While federal investigators have increased efforts in recent years to enforce the FCPA, which is intended to thwart illicit payments to foreign officials, Peterson’s case is among the first related to the financial services industry.

The sentence, imposed by U.S. District Judge Jack Weinstein in Brooklyn, New York, was much shorter than the 51- to 60-month term sought by prosecutors.

A spokesman for U.S. Attorney Loretta Lynch in Brooklyn declined to comment.

During Thursday’s sentencing hearing, Peterson apologized to his family and his former employer, saying he went down “the wrong track” when he entered a suspect real estate deal with an unnamed official from Yongye, a state-owned real estate investment corporation in Shanghai.

Prosecutors accused Peterson of helping the official and a Canadian lawyer they did not identify secretly buy a stake, at a discounted price, in a valuable Shanghai property owned by a Morgan Stanley fund.