Federal Circuit Discusses Rationale Behind Different Measures of Damages
Federal Circuit says expert’s royalty analysis was not improper “pseudo” lost profits analysis that tried to circumvent higher standard of proof, where expert considered plaintiff’s profits as one of many factors in her hypothetical-negotiation model.
Tax Court Valuation of Public Utility Gets Mixed Marks From State High Court
State Supreme Court says, in valuing public utility, Tax Court had discretion to adopt Commissioner expert’s position on company-specific risk premium and build-up method but failed to explain choice of specific beta factors; Supreme Court remands.
Damages testimony undergoes Daubert treatment in class certification stage
Class actions have their own rules, including when it comes to expert testimony. An unresolved issue is whether damages expert testimony is subject to a Daubert inquiry at the class certification stage, before the court has approved the request to proceed as a class action. The U.S. Supreme Court has yet to give clear guidance, but defendants are increasingly proactive and move to exclude the testimony at the beginning of the litigation in an attempt to thwart class certification and knock the case out early.
CUT Method Prevails in Amazon’s Transfer Pricing War With IRS
In transfer pricing case, Tax Court says Amazon more accurately determined buy-in and cost-sharing payments by using CUT method to value separately three types of intangible assets; IRS’s DCF analysis results in improper enterprise valuation, court says.
Amazon.com, Inc. v. Commissioner (I)
In transfer pricing case, Tax Court says Amazon more accurately determined buy-in and cost-sharing payments by using CUT method to value separately three types of intangible assets; IRS’s DCF analysis results in improper enterprise valuation, court says.
Expert’s Damages Opinion Specific Enough for Class Certification Stage
In a securities case, court applies Daubert analysis to plaintiff expert’s market efficiency opinion and event study; expert is qualified even without academic background, and his damages opinion is sufficiently specific to facts of the case and reliable.
Willis v. Big Lots, Inc.
In a securities case, court applies Daubert analysis to plaintiff expert’s market efficiency opinion and event study; expert is qualified even without academic background, and his damages opinion is sufficiently specific to facts of the case and reliable.
Brundle v. Wilmington Trust N.A. (I)
Court finds ESOP trustee liable for allowing overpayment for company shares; trustee rushed transaction and failed to scrutinize financial advisor’s valuation ignoring red flags related to projections, use of control premium, beta, rounding up of values.
Trustee Liable for Inadequate ESOP Valuation Vetting
Court finds ESOP trustee liable for allowing overpayment for company shares; trustee rushed transaction and failed to scrutinize financial advisor’s valuation ignoring red flags related to projections, use of control premium, beta, rounding up of values.
New Jersey court applies DLOM in forced buyout: Defendant’s conduct created ‘extraordinary circumstance’
In adjudicating a New Jersey family dispute that escalated into an oppressed shareholder action, the trial court recently found the oppressing shareholder had created a situation that mandated the application of a discount for marketability (DLOM) in order to achieve a “fair and equitable” outcome.
Tennessee Sticks With Delaware Block Method in Judicial Appraisals
Appeals court says trial court followed applicable law when it used Delaware block method to determine fair value of dissenting shareholders’ interests; court declines to change law on valuation, saying reversal must come from state Supreme Court.
Supreme Court Obfuscates Design Patent Damages Issue
Supreme Court agrees with Samsung that design patent infringement damages statute (Section 289) does not per se require infringer to pay profits from entire product but can be limited to profits from component(s) to which the protected design was applied.
Chancery Bases Fair Value Calculation on Income-Based Model
Flawed sales process makes merger price an unreliable indicator of fair value for statutory appraisal, Chancery finds; in accord with party experts, court uses discounted net income approach and adopts most of respondent expert’s inputs for its valuation.
Washington Court Explains Principle Guiding Double-Dip Analysis
Appeals court says there was no double dipping where the business, valued under an income approach, was a going concern, not a fixed asset, and would continue to generate income for owner spouse with which to pay maintenance award to nonowner spouse.
Ramundo v. Ramundo
Appeals court upholds medical practice valuation despite gaps in expert analysis, including failure to analyze goodwill and exclude premarriage value portion of practice; expert’s job was “complicated” due to owner-spouse’s noncompliance with discovery.
Expert’s Best-Effort Medical Practice Valuation Holds Up on Appeal
Appeals court upholds medical practice valuation despite gaps in expert analysis, including failure to analyze goodwill and exclude premarriage value portion of practice; expert’s job was “complicated” due to owner-spouse’s noncompliance with discovery.
Defendant’s Move to Exclude Damages Expert at Class Certification Stage Fails
Court performs Daubert inquiry at class certification stage, finding plaintiffs’ expert testimony is admissible; expert has shown it is possible to calculate damages by applying common, reliable formula to entire class, court says, certifying class.
In re Stericycle, Inc.
Court performs Daubert inquiry at class certification stage, finding plaintiffs’ expert testimony is admissible; expert has shown it is possible to calculate damages by applying common, reliable formula to entire class, court says, certifying class.
No ‘Circular Reasoning’ in Expert’s Lost Profits Calculation
Appeals court upholds lost profits award, finding expert’s damages model was admissible under Daubert; market survey was only one of “competing principles or methods” to gather facts on sales, and failure to use it does not make opinion per se unreliable.
Packgen v. Berry Plastics Corp. (II)
Appeals court upholds lost profits award, finding expert’s damages model was admissible under Daubert; market survey was only one of “competing principles or methods” to gather facts on sales, and failure to use it does not make opinion per se unreliable.
Matter of Digeser v. Flach
Income approach, capitalization rate, expert testimony, valuation methods, fair value, minority oppression, statutory appraisal, S corporation, C corporation, normalization, market-based approach, comparable transactions ...
Court Dismisses S Corp Tax Argument in Fair Value Buyout
In statutory fair value proceeding, court adopts income-based approach reconciling key differences in expert analyses regarding historical earnings period, tax rates, and normalization for intercompany transactions; court rejects market analysis.
Double-Dip Claim Fails to Resonate With Appeals Court
Court says awarding husband family business plus business income taken out to make business-related payments does not fit “notion of an impermissible ‘double dip’”; business was not a diminishing asset, and wife did not receive either of those assets.
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.
Compromised Asset Appraisals Undo Like-Kind Tax Plan
Tax Court says taxpayer’s transactions fail to meet Section 1031 requirements for income tax deferral; legal advisor’s ongoing interference with appraisal process compromised asset appraisals undergirding transactions to the point they became “useless.”