U.S. District Court Partially Excludes Witness in Securities Value Case and Allows Rebuttal Witness
A pharmaceuticals company sued its former CEO for, among other things, breach of contract and for a declaratory judgment establishing the contractual rights and obligations of the parties. This resulted in counterclaims by the former CEO, Michael Goldberg. Goldberg submitted for testimony of damages Terry Lee Orr, CPA. In this matter, the company sought to exclude Orr’s testimony and, absent his exclusion, to present their own expert, William F. Murray, CPA, as a rebuttal expert. Goldberg sought to exclude the testimony of Murray. The court excluded portions of Orr’s testimony and denied the exclusion of Murray as a rebuttal expert.
Appraisers have highest exclusion rate under Daubert, per PwC study
Under Daubert, appraisers were excluded more often in 2021 than any other type of financial expert witness, according to the PwC survey, “Daubert Challenges to Financial Experts (2000-2021).”
Court uses old transaction to value a dental practice
In a North Carolina divorce case, the wife’s stake in a dental practice was valued based on what she paid for it two years before she and her husband separated in 2015 (the valuation date).
Divorce courts getting flexible on valuation dates
One of the interesting points made at the recent AAML/BVR National Divorce Conference was that judges in marital dissolution cases now tend to want more current valuations, particularly when subsequent events may have impacted value.
Hitchner on citing BV books and cases
It’s fine to cite authoritative texts in your report—but court cases are another story, advises Jim Hitchner (Financial Valuation Advisors). He spoke at last week’s Forensic and Valuation Services Conference hosted by the New Jersey Society of Certified Public Accountants (NJCPA).
Goicochea v. Goicochea
This case was an appeal from a trial court’s various decisions relating to a divorce matter. Among other issues appealed, the appellate court affirmed the trial court’s determination of the value of the husband’s small minority interest (0.829301%) in an ambulatory surgery center. The wife’s expert used a prior transaction of a 1.1125% in the center to determine the husband’s value.
Maryland Court Affirms the Value of Husband’s Minority Interest in an Ambulatory Surgery Center
This case was an appeal from a trial court’s various decisions relating to a divorce matter. Among other issues appealed, the appellate court affirmed the trial court’s determination of the value of the husband’s small minority interest (0.829301%) in an ambulatory surgery center. The wife’s expert used a prior transaction of a 1.1125% in the center to determine the husband’s value.
Great turnout for the AAML/BVR National Divorce Conference
The AAML/BVR National Divorce Conference harkened back to prepandemic times as family law attorneys and valuation experts met in person in Las Vegas September 18-20.
Logue v. Logue
In this marital dissolution case in North Carolina, the appellate court affirmed the trial court’s determination of value of the wife’s dental practice. The trial court determined the value based on the value of the entire practice determined several years before the separation date. That value was determined by appraisals by professional appraisers to determine the buyout of the husband’s father’s 50% interest in the practice. No evidence of value as of the separation date was provided by the parties who decided not to hire appraisers to assess the value at the separation date.
North Carolina Appellate Court Values a Dental Practice Based on a Two-Year-Old Purchase of an Interest in the Practice
In this marital dissolution case in North Carolina, the appellate court affirmed the trial court’s determination of value of the wife’s dental practice. The trial court determined the value based on the value of the entire practice determined several years before the separation date. That value was determined by appraisals by professional appraisers to determine the buyout of the husband’s father’s 50% interest in the practice. No evidence of value as of the separation date was provided by the parties who decided not to hire appraisers to assess the value at the separation date.
Expert can’t testify regarding legal and state of mind opinions
In a case in Delaware Chancery Court concerning breach of fiduciary duty surrounding an acquisition, a well-known expert has had the court partially exclude his testimony.
Manbro Energy Corp. v. Chatterjee Advisors, LLC
The primary focus of this case was cross-motions for summary judgment on issues dealing with fiduciary duty and implied covenant of good faith and fair dealing. A final issue, of importance to valuation experts, was a motion to exclude the testimony of the plaintiff’s valuation expert, which the court denied.
U.S. District Court (New York) Denies Motion to Exclude Expert Witness
The primary focus of this case was cross-motions for summary judgment on issues dealing with fiduciary duty and implied covenant of good faith and fair dealing. A final issue, of importance to valuation experts, was a motion to exclude the testimony of the plaintiff’s valuation expert, which the court denied.
Expert’s testimony excluded regarding licensing tattoos to video games
In a copyright infringement case in federal court in Ohio, a tattoo artist sued a video game company for depicting NBA players adorned with his copyrighted tattoos.
Parties' Motions to Exclude Each Other’s Experts Are Granted in Part and Denied in Part
In this trade secrets and breach of contract case, portions of each expert’s testimony were found to be offering a factual narrative that is within the purview of a lay jury to ascertain. Those portions of testimony were excluded for both experts, but the parties’ arguments as to the qualifications of the experts and supposed reliance of an expert on the work of another were denied.
Redcell Corp. v. A.J. Trucco, Inc.
In this trade secrets and breach of contract case, portions of each expert’s testimony were found to be offering a factual narrative that is within the purview of a lay jury to ascertain. Those portions of testimony were excluded for both experts, but the parties’ arguments as to the qualifications of the experts and supposed reliance of an expert on the work of another were denied.
Delaware court cites studies of appraiser bias
Valuation experts who testify should not assume that the courts view them as independent parties who are advocates for their opinion rather than for the client.
Hayden v. 2k Games, Inc.
The defendants in this case regarding licensing of tattoo designs for a video game moved to exclude the testimony of the plaintiff’s expert regarding a “Market Opinion.” The motion was granted in part and denied in part by the court.
U.S. District Court Excludes Testimony Speculating What Is in People’s Minds and Certain Legal Determinations
The defendants in this case regarding licensing of tattoo designs for a video game moved to exclude the testimony of the plaintiff’s expert regarding a “Market Opinion.” The motion was granted in part and denied in part by the court.
Appraisers Have the Highest Exclusion Rate Under Daubert, Per PwC Study
A look at the latest study from PwC that analyzes challenges to financial expert witnesses (appraisers, accountants, economists, and others) under the Daubert standards from 2000 to 2020. Also, some classic advice on how to survive a Daubert challenge.
In re Columbia Pipeline Group
“In plaintiffs' action against an energy company for aiding and abetting alleged breaches of fiduciary duty by the officers of a pipeline company, the court granted a motion in limine to exclude an expert's report under Del. R. Evid. 702(a) because it expressed a legal opinion on whether the fiduciaries' conduct was reasonable. [Also], [t]he expert report impermissibly expressed opinions about state of mind, which were factual determinations for the court to make. [Finally] [t]he expert offered impermissible opinions about whether the parties believed their agreement was breached, because he interpreted the agreement using extrinsic evidence.”
Expert Excluded for Offering Legal and State of Mind Opinions in Delaware
“In plaintiffs' action against an energy company for aiding and abetting alleged breaches of fiduciary duty by the officers of a pipeline company, the court granted a motion in limine to exclude an expert's report under Del. R. Evid. 702(a) because it expressed a legal opinion on whether the fiduciaries' conduct was reasonable. [Also], [t]he expert report impermissibly expressed opinions about state of mind, which were factual determinations for the court to make. [Finally] [t]he expert offered impermissible opinions about whether the parties believed their agreement was breached, because he interpreted the agreement using extrinsic evidence.”
Rule 702 and the Daubert Standard
Recently, another case has raised questions about what is and what is not admissible. In Auto Konnect, LLC v. BMW of N. Am., LLC; 2022 U.S. Dist. LEXIS 42345 *, the court allowed the testimony of a damages expert for the plaintiff who, according to the defendant, was not a CPA.
Using the Valuation Report as a Selling Tool
A business valuation report is the perfect forum for selling the valuation analyst’s conclusion regarding the value of the valuation subject. This is an excerpt from the new sixth edition of Understanding Business Valuation, which has a companion website that includes a good selection of full sample valuation reports.
Koch v. Koch
This shareholder dispute case involved two businesses three brothers in Minnesota owned. One of the brothers, Jim Koch, had a falling out with the other two, Randy and Dave Koch. A temporary agreement was made among them in 2006, but subsequently the relationship and actions of the parties deteriorated. In particular, an IRS audit of the two businesses triggered a disagreement as to whether required payments under the agreement had to be tax deductible. Certain actions by the defendants breached the 2006 agreement as determined by a jury resulting in a damages award of $12 million. The court then held a bench trial to determine the value of the two businesses for determining the buyout amount for Jim’s interest in both businesses. Experts for each side testified as to value. The opinion provided a good analysis of the various issues in the methodologies each of the experts used.