BVLaw provides 3,000+ cases and case abstracts that cover business valuation issues such as economic damages, lost profits, estate and gift tax, divorce, shareholder oppression, partnership dissolution, securities litigation, and more. 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, BV Update's digests, and the court documents, are available at BVLaw.
- Versata Software, Inc. v. SAP America, Inc., 2013 U.S. App. LEXIS 8838 (May 1, 2013) Federal Circuit affirms lost profits and royalty award finding defendants raised questions of admissibility of plaintiff expert testimony in the “improper context” because these are Daubert issues; also plaintiffs’ lost profits theory meets Panduit requirements because plaintiffs showed that there was demand for the technology during the damages period even if there were no actual sales of the specific software embodying it.Key Words: Lost profits, Damages, Reasonable royalty, Daubert, Panduit Experts: Neeraj Gupta, Chris Blackwell, Roy Weinstein (plaintiffs); Michael Wagner (defendants) Judge: Rader State/Jurisdiction: Federal Court: United States Court of Appeals for the Federal Circuit Type of case: Intellectual Property SIC code: 7372 Prepackaged Software (Software Publishing)
- Ericsson Inc. v. D-Link Corp., 2013 U.S. Dist. LEXIS 71564 (May 21, 2013) In IEEE 802.11n standard infringement case, district court denies defendants’ Daubert motion finding plaintiff expert’s damage model based on per unit royalty on sales of accused products included two levels of apportionment to properly capture only the value of the contribution of the asserted patents to end products and did not implicate entire market value rule.Key Words: Daubert, Patent infringement, IEEE standard, Reasonable royalty, Apportionment, Entire Market Value Rule, EMVR Experts: John R. Bone (plaintiffs); unknown (defendants) Judge: Davis State/Jurisdiction: Federal/Texas Court: United States District Court Type of case: Intellectual Property SIC code: 4899 Communications Services N.E.C.
- Sharp v. Sharp, 2013 Neb. App. LEXIS 58 (April 9, 2013) In using the capitalization of earnings method to value husband’s medical practice, the wife’s expert did not improperly include personal goodwill, the appellate court finds; the valuation rested on actual earnings with some adjustment for reasonable compensation.Key Words: Capitalization of earnings, Goodwill, Reasonable compensation, Marital dissolution Experts: Luke Northwall (wife); Chris Best (husband) Judge: Moore State/Jurisdiction: Nebraska Court: Court of Appeals Type of case: Marital Dissolution SIC code: 8011 Offices and Clinics of Medical Doctors
- MyGallons LLC v. U.S. Bankcorp, 2013 U.S. App. LEXIS 11004 (May 31, 2013) Fourth Circuit strikes down as “unsupportable” a $4 million lost profits award in a defamation suit; plaintiff’s first expert, a marketing professor, presented inadmissible growth projections that “ignore business realities”; as they formed the basis for the damage expert’s analysis, his testimony also is excludable.Key Words: Lost profits, Damages, Defamation, Admissibility, Daubert Experts: Paul Seitz (plaintiff); unknown (defendants) Judge: Niemeyer State/Jurisdiction: Federal/North Carolina Court: United States Court of Appeals Type of case: Damages SIC code: 8699 Membership Organizations N.E.C.
- Koehler v. Netspend Holdings Inc., 2013 Del. Ch. LEXIS 131 (May 21, 2013) Court agrees with plaintiff shareholder that the proposed merger was the result of a defective sale process that included the company board’s reliance on a weak fairness opinion with valuations that were “poor indicators” of the company’s value; the sale price was below the price range the DCF valuation determined, the court finds.Key Words: Dissenting shareholder, Merger, Fairness opinion, Market check, Discounted Cash Flow (DCF), Premium Experts: Unknown (plaintiff); unknown (defendants) Judge: Glasscock State/Jurisdiction: Delaware Court: Court of Chancery Type of case: Dissenting shareholder SIC code: 6153 Credit Card Service
- Davis v. Commissioner, 2013 U.S. App. LEXIS 9850 (May 16, 2013) Eleventh Circuit upholds Tax Court’s $36.9 million valuation of executive stock option, finding that by using the parties’ negotiated formula for the number of shares equaling $16 million at the date of exercise and declining to apply a marketability discount, the Tax Court “at bottom” used the parties’ own valuation.Key Words: Stock option, Discount for lack of marketability, DLOM, Divorce, IRC Section 1041, IRC Section 83, Experts: Alex Howard (Petitioner) Judge: Ripple State/Jurisdiction: Federal/Eleventh Circuit Court: United States Court of Appeals Type of case: Federal Taxation SIC code: 6141 Personal Credit Institutions – Specific Categories -
- In Re: LMR, LLC, 2013 Bankr. LEXIS 2127 (May 24, 2013) In Chapter 11 proceeding, Bankruptcy Court approves debtor hotel owner’s reorganization plan over objection of creditor that holds both secured and unsecured claims; applying the “Till formula approach,” the court decides the plan’s proposed 6% “cramdown” interest rate for both types of claims suffices to ensure the creditor will yield at least the present value of its claims.Key Words: Bankruptcy, Chapter 11, Till formula, Cramdown, Sect. 1129, Bankruptcy Code Experts: None (debtor); Byron Hinton (creditor) Judge: Mott State/Jurisdiction: Federal/Texas Court: United States Bankruptcy Court Type of case: Bankruptcy SIC code: 7011 Hotels and Motels
- Citrin Holdings, LLC v. Minnis, 2013 Tex. App. LEXIS 5723 (May 9, 2013) Appeals court strikes down $28.2 million award to minority owner finding expert’s determination of the present value of the owner’s interest in income-producing properties relied on majority owner’s unreliable internal projections; although a party’s effort to disclaim its own projections “would lack credibility, if those projections are otherwise reliable,” here they merely state values the majority owner hoped for.Key Words: Daubert, Admissibility, Dissenting shareholder, Damages, Breach of Fiduciary Duty, Experts: Scott Bayley (plaintiffs); Dr. Flores (defendants) Judge: McCally State/Jurisdiction: Texas Court: Court of Appeals Type of case: Dissenting shareholder SIC code: 6513 Operators of Apartment Buildings