New valuation cases added to BVLaw
Here's a sampling of some recent cases where the courts have evaluated the testimony of financial experts to arrive at their final conclusions. As always, BVWire' digests, and the court documents, are available at BVLaw.
Jack Tyler Engineering Co. v. Colfax Corp., 2013 U.S. Dist. LEXIS 51603 (April 10, 2013)
In Daubert ruling, court says expert’s lost profits calculation based on discounted cash flow (DCF) method is reliable; plaintiff’s expert properly determined discount factor based on identified sources and made permissible judgment calls based on his expertise.
Experts: Dr. Ralph Scott (plaintiff); Z. Christopher Mercer (defendant)
Judge: Cleland
State/Jurisdiction: Federal/Tennessee
Court: United States District Court
Type of case: Contract
SIC code: 3560 General Industrial Machinery & Equipment
Patel v. Patel, 2013 Va. App. LEXIS 110 (April 9, 2013)
The appellate court finds that, performing the requisite intrinsic value review, the circuit court properly declined to include in its analysis any discounts the husband’s expert proposed to account his fractional interest in companies owning hotels; such discounts arose from the expert’s different valuation method.
Experts: Mike Miller (wife); Michael Cummings, Larry Salzman (husband)
Judge: Humphreys
State/Jurisdiction: Virginia
Court: Court of Appeals
Type of case: Marital Dissolution
SIC code: 7011 Hotels and Motels
Synqor, Inc. v. Artesyn Technologies, Inc., 2013 U.S. App. LEXIS 5051 (March 13, 2013)
Federal Circuit finds jury’s lost profits and reasonable royalty award based on plaintiffs’ price erosion theory is not excessive; sufficient evidence supported expert’s “but for” damages model calculating prices two to three times as much as the prices the defendants actually charged.
Experts: Brett Reed (plaintiff); unknown (defendants)
Judge: Rader
State/Jurisdiction: Federal Circuit
Court: United States Court of Appeals
Type of case: Intellectual Property
SIC code: 3612 Power, Distribution, and Specialty Transformers
Gentile v. Gentile, 2013 U.S. App. LEXIS 5051 (March 13, 2013)
Appellate court affirms lower court’s Fair Market Value (FMV) determination of husband’s S Corp. medical practice, which incorporates goodwill value the wife’s expert calculated based on the Goodwill Registry.
Experts: Bernard Agin (wife); Steve Steer (husband)
Judge: Kilbane
State/Jurisdiction: Ohio
Court: Court of Appeals
Type of case: Marital Dissolution
SIC code: 8011 Offices and Clinics of Medical Doctors
Aries Communications Inc. v. Commissioner, 2013 Tax Ct. Memo LEXIS 111 (April 10, 2013)
In determining reasonable compensation for an employee who is also the owner/operator of a company and enabled the profitable sale of its major assets, the Tax Court finds comparisons to similar corporations “difficult” given the company’s unique situation; it accords equal weight to the calculations the parties’ experts made as to fixed compensation, but, using “our best judgment,” sets a reasonable bonus amount based on the achieved increase in the sale price.
Experts: Martin Wertlieb (petitioner); Andrew J. Caffrey, Mark R. Lipis (respondent)
Judge: Wherry
State/Jurisdiction: Federal
Court: United States Tax Court
Type of case: Federal Taxation
SIC code: 4832 Radio Broadcasting Stations
Charles v. Charles, 2013 Cal. App. Unpub. LEXIS 2386 (April 2, 2013)
California appellate court affirms trial court’s rejection of husband’s motion to value the community business at separation rather than at trial; the latter is the presumed valuation date under state law and the husband’s request was not “good cause,” but an untimely effort to reduce the value of the community business, the court finds.
Experts: Thomas Turk (wife); Alfred Warsavsky (husband); Glenn Mehner (joint)
Judge: Bedsworth
State/Jurisdiction: California
Court: Court of Appeal
Type of case: Marital dissolution
SIC code: 7389 Interior Design Services
SSL Services, LLC v. Citrix Systems, Inc., 2013 U.S. Dist. LEXIS 4275 (April 17, 2013)
District court denies defendants’ post-trial challenge to $10 million jury award finding the fact that the patent assignee at the time of the hypothetical negotiation was worth less than its single patent-in-suit does not control the assessment of patent damages; also, the plaintiff’s expert based his royalty rate on sufficiently comparable prior agreements featuring the actual parties and the patent in dispute.
Experts: Brett Reed (plaintiff); Dr. Charles R. Mahla (defendants)
Judge: Gilstrap
State/Jurisdiction: Federal/Texas
Court: United States District Court
Type of case: Intellectual Property
| SIC code: 5415 Computer Systems Design and Related Services |
Great Lakes Business Trust v. M/T Orange Sun, 2013 U.S. App. LEXIS 8689 (April 30, 2013)
In summary (non-precedential) order, appellate court upholds $11.7 million loss of use award arising out of a collision at sea between defendants’ cargo vessel and plaintiffs’ unique dredge, finding the district court “permissibly determined” there was as “active market” for the dredge’s services and that it would have found work “if not” for the accident; also, the lower court properly considered the market when it adopted the plaintiffs’ proposed 92% utilization rate.
Experts: Samuel Goldfarb (plaintiffs); Louis Magnan (defendants)
Judge: Panel
State/Jurisdiction: Federal/New York
Court: United States Court of Appeals
Type of case: Damages
| SIC code: 1629 Heavy Construction NEC |