Business interruption cases and the role financial experts can play
To mitigate the impact of COVID-19, business owners have increasingly turned to business interruption insurance.
Business interruption and other legal claims arising out of COVID-19 crisis
Just as the novel coronavirus causing COVID-19 brought businesses and economic activity to a sudden halt, an ABA panel discussed the grave effects on businesses and the legal doctrines available to business owners to mitigate the economic injury stemming from business interruption and unforeseeable circumstances.
Binghamton Precast & Supply Corp. v Liberty Mutual Fire Insurance Co.
In dispute over business interruption insurance coverage, appellate court says plaintiff showed actual loss of business income within meaning of controlling policy; court rejects defendant’s argument that plaintiff had to show lost sales, saying this is not a reasonable interpretation of policy.
Court Affirms Plaintiff’s Showing of Loss of Income Pursuant to Business Interruption Policy
In dispute over business interruption insurance coverage, appellate court says plaintiff showed actual loss of business income within meaning of controlling policy; court rejects defendant’s argument that plaintiff had to show lost sales, saying this is not a reasonable interpretation of policy.
Legal avenues for businesses coping with COVID-19 disruption and damages
In Franchising in the Time of COVID-19, an ABA panel recently discussed the scope of the disruption the pandemic has caused for franchisees and franchisors as well as legal doctrines on which franchisees/franchisors might rely to deal with the monetary damages to their businesses.
Business Interruption Claim Raises Triable Issue as to Viability of New Business, Court Finds
In business interruption case, court denies insurer’s summary judgment motion, finding plaintiff’s breach of contract suit raises many issues of material fact, including whether plaintiff’s fledgling business was ever viable and, but for insurer’s refusal to pay claim, could have resumed operations.
Optical Works & Logistics, LLC v. Sentinel Ins. Co.
In business interruption case, court denies insurer’s summary judgment motion, finding plaintiff’s breach of contract suit raises many issues of material fact, including whether plaintiff’s fledgling business was ever viable and, but for insurer’s refusal to pay claim, could have resumed operations.
Court Agrees Market Approach Generates Most Accurate Value of Plaintiff’s Interest
In business dispute alleging breach and fraud, court adopts plaintiff expert’s methodology to value contested interest by way of the market approach; court notes expert well explained why the income approach was not available and the asset approach was too limited to provide an accurate valuation.
Edelson v. Cheung
In business dispute alleging breach and fraud, court adopts plaintiff expert’s methodology to value contested interest by way of the market approach; court notes expert well explained why the income approach was not available and the asset approach was too limited to provide an accurate valuation.
Great Hill Equity Partners IV, LP v. SIG Growth Equity Fund I, LLP
Court rejects plaintiff’s damages calculation related to sweeping fraud and contract breach allegations where plaintiff submitted expert report before court’s liability rulings and failed to offer revised expert report after liability trial; damages were not sufficiently tied to proven wrongs.
Plaintiff’s Overbroad Damages Calculation Prompts Court Not to Grant Award for Proven Wrongdoing
Court rejects plaintiff’s damages calculation related to sweeping fraud and contract breach allegations where plaintiff submitted expert report before court’s liability rulings and failed to offer revised expert report after liability trial; damages were not sufficiently tied to proven wrongs.
Eurochem North America Corp. v. Ganske
Court finds proposed expert testimony inadmissible under Rule 702 and Daubert where expert did not himself prepare the value determination, conceded any estimate of value by his firm was prepared for marketing purposes, and where damages model that expert testimony supported was fatally flawed.
Lack of Valuation Credentials Does Not Disqualify Expert, but Failure to Perform Valuation Does, Court Finds
Court finds proposed expert testimony inadmissible under Rule 702 and Daubert where expert did not himself prepare the value determination, conceded any estimate of value by his firm was prepared for marketing purposes, and where damages model that expert testimony supported was fatally flawed.
Court Rejects Parties’ Expert Valuations of Unique Sailing Vessel as Unreliable
In damages case involving unique ship for which there was no active market, court says parties’ experts provided some data points relevant to valuing ship but failed to give adequate explanations of rationales and calculations, making testimony unreliable; court performs its own analysis.
In re Manhattan By Sail, Inc.
In damages case involving unique ship for which there was no active market, court says parties’ experts provided some data points relevant to valuing ship but failed to give adequate explanations of rationales and calculations, making testimony unreliable; court performs its own analysis.
Plaintiff Fails Panduit Test Where Lost Profits Analysis Includes ‘Far More’ Than Value of Patents
In infringement case, court rejects plaintiff expert’s lost profits and reasonable royalty analyses, noting both rely on supply agreements covering more than the value of the patents; plaintiff fails Panduit test but is entitled to reasonable royalty based on opposing expert’s calculation.
Sunoco Partnership Mktg. & Terminals L.P. v. U.S. Venture, Inc.
In infringement case, court rejects plaintiff expert’s lost profits and reasonable royalty analyses, noting both rely on supply agreements covering more than the value of the patents; plaintiff fails Panduit test but is entitled to reasonable royalty based on opposing expert’s calculation.
Lost profits claims fail to meet New York’s strict standard
Establishing lost profits under New York law can be difficult.
Business Valuation Update Yearbook, 2020 Edition
January 2020 PDF
BVR (editor)
Business Valuation Resources, LLC
Court Decides Daubert Exclusion of Expert Testimony for Failure to Apportion Is Premature
In trade secrets dispute, court denies defendant’s Daubert motion, finding exclusion of opposing damages expert testimony for failure to apportion is premature; whether or not entire market value rule applies is determination for jury “after hearing all the documentary and testimonial evidence.”
Pawelko v. Hasbro, Inc.
In trade secrets dispute, court denies defendant’s Daubert motion, finding exclusion of opposing damages expert testimony for failure to apportion is premature; whether or not entire market value rule applies is determination for jury “after hearing all the documentary and testimonial evidence.”
Supreme Court reviews damages issue in trademark infringement case
The U.S. Supreme Court is about to hear arguments in a trademark infringement case that turns on whether the plaintiff, in order to obtain the infringer’s profits, has to show willful infringement by the defendant.
Reasonable Certainty for New Business Lost Profit Calculations
New-business lost profit calculations have been a heavily contested topic. Many courts and practitioners rely on historical approaches using historical data of the company itself or a “comparable” company. Join Josh Shilts for a discussion of recent case law and various approaches and learn techniques to validate your lost profit projection. Take these skills and make your report and testimony more defensible.
IceMOS Tech. Corp. v. Omron Corp.
In contract dispute, court denies defendant’s Daubert motions, finding plaintiff’s experts are qualified based on extensive experience in relevant industry; experts could provide testimony relevant to surviving lost development support costs claim and their testimony is not unreliable as of now.
Plaintiff’s Projections Fail to Meet New York Test for Lost Profits or Lost Business Value
A breach of contract case in which the plaintiff asked for various types of economic damages is noteworthy for the court s extended discussion of what the plaintiff must show under New York law to make a case for lost profits. The court explained that the hurdle was particularly high for a new business or a business trying to break into a new market considering the company s lack of a financial track record. Damages must be ...