Book Review This fall, the American Bar Association released Shannon Pratt’s The Lawyer’s Business Valuation Handbook 3rd Edition. This publication has been edited by Roger J. Grabowski, FASA and Alina Niculita, ASA, ARM-BV, CFA, MBA. It is a comprehensive guide for attorneys (and judges) to enable them to better understand the substance and basis of the valuation expert’s work. In this article, Michael G. ...

A Series on Managing Uncertainty and Fear (Part II) Clients may feel isolated or overwhelmed by financial decisions. Create an environment where clients feel safe asking questions and expressing concerns. Make sure to include attorneys, financial planners, etc. to provide comprehensive support. The author, in this second part of the series, shares his strategies to address uncertainty and fear. Read Part I ...

Why AI may Undermine Your Credibility as an Expert Witness In a recent New York Surrogate’s Court decision (Matter of Weber, 2024 NY Slip Op 24258), an expert witness’s reliance on Microsoft Copilot for financial calculations led to a notable exclusion of their testimony. The court highlighted the risks of using generative AI for evidence-based tasks, marking a significant moment for experts in accounting a ...

From $600 to Over $1 Billion The EU General Data Protection Regulation (GDPR) and other data protection regulations apply to the smallest sole practitioner firm among us to the largest and each must take steps to implement a cybersecurity plan, to follow it, and to respond when an incident occurs. The failure to provide protection can result in fines. In this article, the author describes why Amazon and Goo ...

Unimpeachable Neutrality in the Age of Artificial Intelligence The world of economic damage and business valuation is evolving rapidly, with artificial intelligence (AI) poised to become an indispensable tool for financial expert witnesses. As with any technological advancement, its use and implementation with regards to expert opinions, conclusions, and testimony must be handled with unimpeachable neutrali ...

My First Use of AI for a Work Assignment Recently, the author received an assignment which called for him to make a calculation that he had not performed in the past. With great hesitance, he decided to ask AI for help. In making the leap to enter the AI pool, he found the answer he needed and confidence to “try it again.” He has found a new tool to put in his litigation support tool kit. In this article, h ...

From a Forensic Accountant’s Viewpoint Forensic accountants are frequently retained to evaluate economic damages arising from a multitude of circumstances. These engagements require a set of specialized knowledge unique to the facts of the case. In many cases, a forensic accountant will be retained to evaluate lost income arising from a business interruption loss. This article compares a forensic accountant ...

Approaches, Standards, and Terms Although machinery and equipment appraisals differ from business valuations as a distinct branch of the appraisal practice, many overlapping concepts reinforce and support the key factors needed to establish a reliable and defensible opinion of value for the subject assets. This article provides a primer on the subject matter.   "In the world of valuation, the most important ...

A Meandering in the Mind(s) of ChatGPT (Part I of III) This series chronicles the use of an AI generation tool to generate content. Most of the uses the author has heard of from colleagues rely on an AI tool to generate content in response to various questions. Through the series the author shares iterations of an article that relied on AI and provides examples to show how a story can change using AI. Some ...

A Series on Managing Uncertainty and Fear The author has testified hundreds of times. Through these experiences, he has gained insight that is not written in the books, or at least not the ones he has been reading as a forensic and valuation professional. In this article, he shares additional insight on what is demanded by expert witnesses. As of the date of this writing, I have testified hundreds of times. ...

Challenges and Key Takeaways The recent case of The Trade Group, Inc. v. BTC Media, LLC highlights the impact that experts have on judicial outcomes. The litigation revolved around a financial dispute over the Bitcoin 2022 conference and allegations regarding overcharges and financial mismanagement. Through expert testimonies, the Court ultimately provided an opinion based on the crucial contributions of ex ...

A Question of Facts and Varying Rates “How could an expert apply such a high or low discount rate to a stream of future lost profits and the court find it acceptable?” This article highlights my research looking into discount rates for lost profits and why there are so many variations of a theme when it comes to making such a calculation. When attending professional conferences, I enjoy talking with other e ...

Reminders from an Experienced Expert that Go Beyond a Checklist Calculating lost profits is a crucial aspect of many legal and financial matters, particularly in the realm of business disputes, insurance claims, and litigation. Lost profits represent the financial harm suffered by a plaintiff due to a specific incident or event. In a business context, lost profits aim to restore the injured party to the fin ...

Experts on Notice Federal Rule of Evidence 702 has undergone changes; these were made in 2000 and 2011. The recent amendments clarify the gatekeeping function of the trial court. A trial court is charged not with weighing the expert’s opinion; rather it is charged with determining if the testimony is admissible. This article discusses the recent changes to this rule and how this will impact proposed experts ...

Guidance Provided by Godinger Silver Art Ltd. The Panduit test is a widely used four factor test that is applied primarily in patent cases but also intellectual property cases. The test factors can be found in Panduit Corp v Stahlin Bros. Fibre Works, Inc. This article will focus primarily on the 2024 Godinger Silver Art Ltd. decision. The language of that decision has been used to explain the court’s under ...

Damages Before? Or Damages After? For those that perform lost profits and other commercial damage calculations, you are most likely familiar with the ex-ante versus ex-post approaches and applications when it comes to applying discounts to present value calculated damages. But what about the application of the ex-ante and ex-post theories and approaches to the damages calculations themselves? This article a ...

The Tax Court Says Certified A recent Tax Court opinion brought to light the importance of having an appraiser designation from a professional appraiser organization. While the decision is limited to Tax Court cases, it provides a cautionary tale for all who provide business appraisals in litigious situations. A recent Tax Court opinion brought to light the importance of having an appraiser designation from ...

The Death of Testimonial Overstatement The proper interpretation for the standard of admissibility under the amended Rule 702 of the Federal Rules of Evidence will hopefully result in an evidentiary change that flies in the face of every hired gun’s essence, as the real impact of the trial court truly being a gatekeeper is that it will shield the jury from the testimonial overstatement salaciously proffered ...

When You are Retained by Counsel for the Out-Spouse Valuing private equity and hedge fund general partner interests is a complex matter. Valuing them in a divorce proceeding can be an even more complex matter. The focus of this article is to share the challenges valuators may face when engaged to value general partner interest in private equity and hedge fund businesses in divorce matters when NOT engaged b ...

Court Admits Royalty Analysis on a Convoyed Sales Approach and Denies Motion to Exclude Patent Infringement Case This case arose from a patent infringement lawsuit filed by the Plaintiff, Daedalus Blue, LLC against the Defendant, MicroStrategy Incorporated. Daedalus alleged that MicroStrategy’s analytics software products infringed on two patents originally developed by IBM: the ‘172 patent related to data ...