Which kind of expert succeeds in economic damages cases?
Not many published court opinions give meaningful guidance on determining the discount rate in economic damages case (see BVWire #92-5). A new decision concerning lost profits for the breach of a franchise lease finds the plaintiff’s BV analyst going against a real estate appraiser, with the win going to—wait for it . . . the [...]
New case digests added to BVLaw
Metro Tech Corp. v. TUV Rheinland of N.A., 2010 WL 4117123 (D. Puerto Rico.)(Oct. 18, 2010); and Metro Tech Corp. v. TUV Rheinland of N.A., 2010 WL 4117115 (D. Puerto Rico.)(Oct. 18, 2010) Court limits damages to breach of contract to those that can be ascertained with reasonable certainty, and qualifies first-time lost profits plaintiff’s [...]
More evidence that certified business appraisers make better experts
R&R International v. Manzen, LLC, 2010 WL 3605234 (S.D. Fla.)(Sept. 12, 2010) There’s been a lot of attention focused on the intangible asset valuation issues in the Uniloc decision last week. But, another recent case highlights some major flaws in business valuation testimony presented by an investment banker–an expert witness with extensive industry knowledge, but who [...]
Kentucky adopts majority rule in statutory FV appraisals
Like many states across the country, Kentucky first enacted a dissenters’ rights statute in 1972 as part of its adoption of the Model Business Corporation Act (MBCA). The statute entitled dissenting shareholders to the “fair value” of their shares without specifically defining the term, and was silent regarding the application of minority and marketability discounts. [...]
Leading guide on lost profit damages for lawyers released with major updates
The new 2011 edition of The Comprehensive Guide to Lost Profits Damages for Experts and Attorneys, edited by Nancy Fannon, includes new chapters on: damages for early stage companies analysis of case law relating to reasonable certainty the benefit of the bargain damages and more. Fully indexed and packed with over 900 pages of content, this guide [...]
Commercial litigation: one valuation method is not enough for DE Chancery Court
In re Hanover Direct, Inc. Shareholders Litigation (Sept. 24, 2010) came down to a “battle of experts,” writes Chancellor Chandler of the Delaware Chancery Court in a recent letter opinion. “Unlike most of these cases, however, this decision turns entirely on the fact that one expert’s proffered opinion, for a host of reasons, was totally, [...]
Valuing damages for breach of oral contract poses problems
Kia v. Imaging Sciences Internat’l, 2010 WL 3516850 (E.D. Pa.)(Sept. 2, 2010) This scene could have played out in countless startup companies—especially in the biotech sector—trying to recruit key personnel: During an employment interview in 2003, the plaintiff, a Ph.D. and one of the “world’s leading engineers” in digital imaging, rejected an initial salary offer [...]
Key job of expert is to educate you on subjective elements in opponents’ valuation reports
“Measuring active and passive appreciation in separate property remains a complicated issue in divorce matters,” Stacy Collins (Financial Research Associates) told the audience last week at the BVR/Morningstar 3rd Annual Summit on Business Valuation in Divorce. That’s why “to be effective as an expert make sure you support your subjective conclusions,” added Mark Sobel (Greenbaum [...]
How to win damages and lost profits cases for your clients
Next Friday, October 8, BVR’s Webinar Series on Damages Essentials kicks off with “Lost Profits Calculations: Methods & Procedures” featuring Robert Gray and James O’Brien (ParenteBeard, LLC). Gray and O’Brien will discuss what every appraiser needs to know when engaging in a lost profits case: from calculations methods and related supporting – and admissible – evidence to [...]
Don’t go to court without a current understanding of cost of capital research
The Global GT case (as reported in BVWire’s June “Supply-side ERP More Reliable, Says Delaware Chancery Court”) shows that at least some courts have become more sophisticated in their understanding of cost of capital analyses. There’s been lots of commentary on this issue (BVR’s digest is available at BVLaw)—but, as usual, Roger Grabowski (Duff & Phelps) [...]
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