Lightbox Ventures, LLC v. 3 RD Home Ltd.
Court excludes lost profits calculation and valuations of new venture; experts’ unquestioning adoption of plaintiff’s data and assumptions, the large range of valuations proffered, and disclaimers accompanying valuations undermine opinions’ meaningfulness.
2nd Circuit Affirms Nixing of Award Due to Bad Yardstick Analysis
Appeals court validates nixing of future lost profits award where expert calculated damages for a startup company based on revenues of market leader; court finds expert failed to use reasonable comparator, making his yardstick analysis legally unsound.
Washington v. Kellwood Co. (IV)
Appeals court validates nixing of future lost profits award where expert calculated damages for a startup company based on revenues of market leader; court finds expert failed to use reasonable comparator, making his yardstick analysis legally unsound.
Defective Lost Profits Analysis Triggers Take-Nothing Ruling
High court discusses level of evidence required to establish future lost profits with “reasonable certainty”; plaintiff did not show it lost any contracts owing to defendants’ wrongdoing and failed to show profitability specific to claimed lost contracts.
Misunderstanding of Facts Results in Overvaluation of Fuel Supply Rights
Debtor’s fuel supply rights had value either in form of an implied contract, customer relationship, or simply an income stream, court says; court does not assign specific value but finds appraiser overstated its value due to misunderstanding of key facts.
Defective Lost Profits Analysis Triggers Take-Nothing Ruling
High court discusses level of evidence required to establish future lost profits with “reasonable certainty”; plaintiff did not show it lost any contracts owing to defendants’ wrongdoing and failed to show profitability specific to claimed lost contracts.
Horizon Health Corp. v. Acadia Healthcare Co.
High court discusses level of evidence required to establish future lost profits with “reasonable certainty”; plaintiff did not show it lost any contracts owing to defendants’ wrongdoing and failed to show profitability specific to claimed lost contracts.
Misunderstanding of Facts Results in Overvaluation of Fuel Supply Rights
Debtor’s fuel supply rights had value either in form of an implied contract, customer relationship, or simply an income stream, court says; court does not assign specific value but finds appraiser overstated its value due to misunderstanding of key facts.
r2 Advisors, LLC v. Equitable Oil Purchasing Co. (In re Red Eagle Oil, Inc.)
Debtor’s fuel supply rights had value either in form of an implied contract, customer relationship, or simply an income stream, court says; court does not assign specific value but finds appraiser overstated its value due to misunderstanding of key facts.
Case Collapses When Experts Apply Wrong Measure of Damages
District court adopts Bankruptcy Court’s finding that expert testimony was inadmissible because the plaintiff’s experts used the wrong method to calculate damages; lost profits were not available where the plaintiff’s business was completely destroyed.
Court Sets Aside Big Lost Profits Award Based on Bad Yardstick Analysis
Court strikes down multimillion-dollar lost profits award, finding it was based on expert testimony that was “sheer surmise and conjecture”; using yardstick method, expert claimed upstart company would have achieved 50% of sales of market leader.
Court Sets Aside Big Lost Profits Award Based on Bad Yardstick Analysis
Court reconsiders earlier order for retrial on lost value damages, finding plaintiffs “had no intention of pursuing a realistic damages award” and lack admissible evidence supporting multimillion-dollar value claims; instead, court awards one dollar.
Case Collapses When Experts Apply Wrong Measure of Damages
District court adopts Bankruptcy Court’s finding that expert testimony was inadmissible because the plaintiff’s experts used the wrong method to calculate damages; lost profits were not available where the plaintiff’s business was completely destroyed.
Court Sets Aside Big Lost Profits Award Based on Bad Yardstick Analysis
Court reconsiders earlier order for retrial on lost value damages, finding plaintiffs “had no intention of pursuing a realistic damages award” and lack admissible evidence supporting multimillion-dollar value claims; instead, court awards one dollar.
Sherwood Invs. Overseas Ltd. v. Royal Bank of Scot. N.V. (In re Sherwood Invs. Overseas Ltd., Inc.)
District court adopts Bankruptcy Court’s finding that expert testimony was inadmissible because the plaintiff’s experts used the wrong method to calculate damages; lost profits were not available where the plaintiff’s business was completely destroyed.
Washington v. Kellwood Co. (III)
Court reconsiders earlier order for retrial on lost value damages, finding plaintiffs “had no intention of pursuing a realistic damages award” and lack admissible evidence supporting multimillion-dollar value claims; instead, court awards one dollar.
Delaware Supreme Court Judge Boos Chancery's Option Valuation Case Analysis
In reviewing one of the Delaware Court of Chancery's most noteworthy rulings from 2015, one judge on the state Supreme Court wrote a stinging critique of the trial court's analysis.
Court Sets Aside Big Lost Profits Award Based on Bad Yardstick Analysis
Court strikes down multimillion-dollar lost profits award, finding it was based on expert testimony that was “sheer surmise and conjecture”; using yardstick method, expert claimed upstart company would have achieved 50% of sales of market leader.
Washington v. Kellwood Co. (II)
Court strikes down multimillion-dollar lost profits award, finding it was based on expert testimony that was “sheer surmise and conjecture”; using yardstick method, expert claimed upstart company would have achieved 50% of sales of market leader.
5th Circuit backs district court's fair market value determination in ESOP dispute
The district court's determination of overpayment was a function of the contract price and the stock’s fair market value on each of three transaction dates. For its FMV determination, the court considered the testimony of three noted valuation experts retained by the plaintiffs, the DOL, and the defendants respectively. Different experts used different methods, different assumptions, different estimates, and they reached different conclusions. But they all used multiple approaches to produce several FMV estimates on the transaction dates. To arrive at a final value determination, or range of values, they all averaged or weighted the results.
Goodwill-noncompete connection trips up buyer of medical practice
Ultimately, the parties reached a deal that included the sale of the building and the sale of the assets of the practice, as well as an employment contract for the doctor. The asset purchase agreement said the assets being sold included all of the practice's goodwill. At the same time, it allocated 100 percent of the purchase price to tangible assets: furniture, fixtures, equipment and supplies. The agreement also included noncompete and non-solicitation clauses.
Chancery declines to meddle in parties' valuation agreement
In terms of valuation methodology, the agreement provided that “there shall be no minority or non-marketability discount applied.” Also, “fair market value” meant an arm’s length sale to an unrelated third party. And, for purposes of calculating the “total equity value,” the value of the assets would be subject to an EBITDA collar to ensure that the value of the assets was at least 6.5 x but no more than 7.5 x the company’s “EBITDA less Maintenance Capex” for year-end 2013. The resulting number was to be reduced by the company’s obligations and liabilities. Most important, the parties agreed to be bound by the appraiser's calculation of the price of the put units. There was no provision for judicial or any other form of review of the appraiser's valuation.
Destruction of financial evidence trips up guilty party's own experts
As a damages expert, what do you do when your own client has destroyed vital financial information? Two highly educated finance professionals working on a contract case solved this dilemma by relying exclusively on the opposing side's sales projections, only to see their analysis buckle under a Daubert challenge.
SIGA Technologies, Inc. v. PharmAthene, Inc.
In major pharmaceutical case, state Supreme Court finds DE Chancery did not abuse its discretion when it awarded plaintiff lump-sum expectation damages and its findings supporting the new damages determination were not clearly erroneously.