Overview of the But For Investment Portfolio

To Measure Trustee Breach of Fiduciary Duty Damages

The but for investment portfolio is a tool that damages analysts utilize to estimate economic damages when there is an allegation of a breach of fiduciary duty with regard to the management of an investment. In its simplest form, the but for investment portfolio estimates the value of a portfolio but for the alleged breach of fiduciary duty. Case law precedents established the but for investment portfolio analysis as a method to estimate economic damages on a market adjusted basis. While the concept of a but for investment portfolio analysis is simple, the creation of a but for investment portfolio is typically complex. This discussion, from a damage’s analyst perspective, provides (1) historical context for the but for investment portfolio in case law; (2) an overview of common breaches of fiduciary duty; and (3) an examination of important areas involved in the construction of the but for investment portfolio.

[su_pullquote align=”right”]Resources:

Taking a Deeper Dive into the Lost Profits “But-For” World

The Reasonable Certainty Requirement in Lost Profits Litigation—Best Practices for Proving Your Damages Calculation

Economic Damages Calculations

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The but for investment portfolio is a tool that damages analysts utilize to estimate economic damages when there is an allegation of a breach of fiduciary duty with regard to the management of an investment. In its simplest form, the but for investment portfolio estimates the value of a portfolio but for the alleged breach of fiduciary duty. Case law precedents established the but for investment portfolio analysis as a method to estimate economic damages on a market adjusted basis. While the concept of a but for investment portfolio analysis is simple, the creation of a but for investment portfolio is typically complex. This discussion, from a damage’s analyst perspective, provides (1) historical context for the but for investment portfolio in case law; (2) an overview of common breaches of fiduciary duty; and (3) an examination of important areas involved in the construction of the but for investment portfolio.

Introduction

The but for investment portfolio is one version of the but for test, which asks, “but for the existence of X, would Y have occurred?”[1] The but for investment portfolio analysis is a common method that may be applied in litigation involving an alleged breach of fiduciary duty with regard to an investment or investment portfolio. The damages analyst constructs the but for investment portfolio to estimate the value of the investment portfolio but for the alleged breach of fiduciary duty. Economic damages are then calculated by subtracting the ending value of the disputed portfolio (i.e., the portfolio with the alleged breach of fiduciary duty) from the ending value of the but for investment portfolio.

The but for investment portfolio analysis provides a market adjusted estimate of economic damages designed to make the beneficiary whole. The but for investment portfolio analysis is intended to capture opportunity cost, whereas other methods for estimating damages may overlook or inappropriately estimate the beneficiary’s opportunity cost.

Other methods for estimating damages in an investment portfolio breach of fiduciary duty case include: awarding the breach of fiduciary damages amount with no adjustment for opportunity cost or carrying the immediate damages calculation forward at a different rate, such as the inflation rate, rate of return of an equity index, risk-free rate, the rate of return on an alternative investment, or another rate of return.

Fiduciaries in breach of fiduciary duty cases involving an investment portfolio may include, but are not limited to: trustees, investment managers, and financial advisors. The fiduciary is typically the defendant in breach of fiduciary duty disputes. Plaintiffs in breach of fiduciary disputes may include, but are not limited to: investors and trust beneficiaries. For simplification purposes, this discussion will focus on trustees as fiduciaries (or defendants) and trust beneficiaries as plaintiffs.

In a breach of fiduciary duty dispute, the damages analyst’s role is to provide an estimate of economic damages related to the alleged breach of fiduciary duty. The damages analyst often creates multiple but for investment portfolios to estimate a range of hypothetical scenarios, which can be used to estimate a range of economic damages. The damages analyst typically does not opine on (1) the allegation, (2) causation, or (3) legal aspects of the dispute. The damages analyst typically operates under the assumption that there was a breach of fiduciary duty. The burden of proving the antecedent of a breach of a fiduciary duty is not part of the damages analyst’s role.

The concept of a but for investment portfolio is relatively straightforward, but the construction of a but for investment portfolio is often complex. The damages analyst generally constructs the but for investment portfolio according to the investment objectives and constraints of the beneficiary or the investment objectives and constraints provided in the trust’s governing documents (i.e., trust agreements, investment policy statements, etc.). There are many variables that can affect the but for investment portfolio damages analysis, such as determining the initial economic damages amount, assessing alternate investment suitability, setting alternate investment asset allocations, establishing rebalancing criteria, and understanding portfolio tax consequences.

The following discussion (1) provides historical precedence for the but for investment portfolio; (2) summarizes common allegations in breach of fiduciary duty disputes; and (3) examines the construction of the but for investment portfolio and the accompanying complexities in its construction.

History

The but for investment portfolio is a product of case law. In 1978, the judicial decision from the Second Circuit Court of Appeals in Rolf v. Blyth, Eastman Dillon & Co., Inc., adjusted economic damages based on changes in the stock market. In this instance, the Second Circuit concluded economic damages by adjusting the plaintiff’s “gross economic loss” for the change in value of “any well-recognized index of value, or combination of indices, of the national securities market during the period commencing with defendant’s [breach of fiduciary duty].” It is noteworthy that in this instance, markets generally declined, so the influence of the market adjustment was to decrease the amount of economic damages.[2]

In 1981, the Fifth Circuit Court of Appeals tried a case that involved churning in a brokerage account. It was determined that the broker initiated unauthorized and/or excess trading or churning.[3] Judge Goldberg colorfully described the excessive commissions paid to the broker as “skimmed milk” and the decline in the plaintiff’s portfolio value as “spilt milk.”

Judge Goldberg explained the calculation of economic damages as follows: “In order to approximate the broker’s misconduct, it is necessary to estimate how the investor’s portfolio would have fared in the absence of [sic] such misconduct. The trial judge must be afforded significant discretion to choose the indicia by which such estimation is to be made, based primarily on the types of securities comprising the portfolio.”

The court upheld the jury’s estimate of economic damages, which incorporated the decline in domestic equity indexes. However, the court opinion referenced the use of a “specialized portfolio” that would more accurately estimate economic damages. The “specialized portfolio” referenced by the court opinion is analogous to a but for investment portfolio.

The Donovan v. Bierwirth litigation involved market adjusted damages and the use of a but for investment portfolio. In Donovan v. Bierwirth, the Secretary of the Department of Labor filed suit against pension plan trustees for the Grumman Corporation Pension Plan, alleging a breach of fiduciary duty for improperly buying Grumman Corporation securities on behalf of the pension plan. The trustees, who were also executives of Grumman Corporation, acquired Grumman Corporation securities to block a tender offer for a controlling interest made by the LTV Corporation. The Grumman Corporation stock purchase was at an elevated price, as the share price increased from $26.75 per share to $35.88 per share as a result of the tender offer announcement. The Grumman Corporation stock traded between $36.00 and $39.34 during the tender offer period (prior to the enjoining of the tender offer for antitrust purposes). When the tender offer failed, the Grumman Corporation stock price decreased to approximately $23 per share. Approximately 17 months later, the trustees sold the shares of Grumman Corporation stock at the then-current price per share of $47.55. Pension plan beneficiaries received a total benefit of $11.41 per share due to capital gains and dividends over their holding period.

The district court dismissed the case, concluding that the pension plan beneficiaries were not damaged due to the gain earned by holding the Grumman Corporation stock. However, in the Second Circuit Court of Appeals, Judge Pierce reversed the district court decision. Judge Pierce determined that “ERISA section 409 requires a comparison of what the [Grumman Corporation Pension] Plan actually earned on the Grumman investment with what the Plan would have earned had the funds been available for other Plan purposes.” Judge Pierce elaborated on the calculation of economic damages as follows:

In determining what the Plan would have earned had the funds been available for other Plan purposes, the district court should presume that the funds would have been treated like other funds being invested during the same period in proper transactions.[4]

Plaintiffs provided a range of economic damages based on three alternative but for investment portfolios that were available to Grumman Corporation Pension Plan participants during the economic damages period.

Breaches of Fiduciary Duty

The prudent investor rule is the standard that fiduciaries are held to in 43 states, the District of Columbia, and the U.S. Virgin Islands.[5] The prudent investor rule, established in the Uniform Prudent Investor Act, is as follows:

A trustee shall invest and manage trust assets as a prudent investor would, by considering the purposes, terms, distribution requirements, and other circumstances of the trust. In satisfying this standard, the trustee shall exercise reasonable care, skill, and caution.

A trustee’s investment and management decisions respecting individual assets must be evaluated, not in isolation, but in the context of the trust portfolio as a whole and as a part of an overall investment strategy having risk and return objectives reasonably suited to the trust.

A trustee shall invest and manage the trust assets solely in the interest of the beneficiaries.

Two common federal laws that may be tried in breach of fiduciary duty cases are the Securities and Exchange Commission (SEC) Rule 10b-5 and the Employee Retirement Income Security Act (ERISA) section 409. SEC Rule 10b-5 deals with fiduciaries trading securities based on misrepresentation and omissions of facts. SEC Rule 10b-5 is used to protect investors and trusts from fraud related to investments and/or transactions due to a breach of fiduciary duty. ERISA section 409 holds fiduciaries personally liable for a breach of fiduciary duty. Imposing personal liability on fiduciaries allows the Department of Labor to enforce liens on the fiduciaries’ property, future income, or accounts to pay debts associated with a breach of fiduciary duty in a retirement fund.

There are many ways in which a breach of fiduciary duty can occur. The following is a non-exhaustive list of actions that may result in a breach of fiduciary duty: (1) the sale of property for less than fair market value; (2) the purchase of property for more than fair market value; (3) the sale of property in violation of duty to retain and the subsequent appreciation of value in the property; (4) the sale of property in violation of duty to retain and the subsequent depreciation of value in the property; (5) the fiduciary generating excessive profits; (6) an improper investment that decreases in value; (7) failure to remain loyal to a specified or predetermined asset allocation; (8) the misuse of funds for personal usage; and (9) the sale of trust property to the trustee.[6]

Generally, the most contested portfolio management breach of fiduciary duty issues related to (1) excess fees and/or expenses related to an investment or portfolio and (2) the suitability of an investment or portfolio. This discussion will focus on these two issues in the following sections.

Fees and/or Expenses

We will first examine the issue of excessive trading in an account which leads to generating excess fees and expenses. In the case of Hatrock v. Edward D. Jones & Co., the Ninth Circuit defined churning as, “…when a securities broker engages in excessive trading in disregard of his customer’s investment objectives for the purpose of generating commission business.” It is important to note that a plaintiff may hold a fiduciary liable for churning without proving loss causation.[7] In other words, churning can occur even when the plaintiff generates a positive return.

Fiduciaries often charge several types of fees and expenses in exchange for portfolio management services and expertise. Common types of fees include: an assets under management (AUM) fee, performance fees, account fees, redemption fees, exchange fees, purchase fees, and others. Due to the significant amount of additional fees, it is important for a fiduciary to effectively communicate the fees and/or expenses charged on the investment portfolio. A fiduciary may breach its fiduciary duty by charging undisclosed or excessive fees.

The following is an example of an undisclosed fees case. In 2015, the SEC charged private equity fund advisers within the Blackstone Group L.P., with failure to disclose the practice of accelerating monitoring fees, failure to disclose a legal fee agreement providing it with a greater discount on its legal fees than the discount the funds received, and failure to adopt and implement written policies and procedures designed to prevent violations of the Investment Advisors Act of 1940, among other charges. The case settled out of court with the Blackstone Group L.P., paying roughly $29 million to the affected fund investors.[8]

Investment Suitability

An additional way a breach of fiduciary duty can occur is through improper investments based on suitability. In laymen’s terms, suitability is whether or not an investment is appropriate for a trust. Fiduciaries often consider several factors when determining the suitability on an investment, two of which are the risk profile and investment goals of the trust.

Each trust has its own unique risk profile, which is based on the trust’s objectives and constraints. The portfolio managers typically develop an Investment Policy Statement (IPS) for the trust portfolio. The IPS characterizes a trust’s objectives and constraints which, in turn, provides a framework for the fiduciary to determine investment suitability and asset allocation.

Risk tolerance is based on propensity and ability to assume risk. For example, in general, an older, retired client will have a lesser ability to assume portfolio risk than a younger client given (1) less human capital, (2) a shorter investment time horizon, and (3) a greater need for current income.

Investment goals are another factor often considered when determining investment suitability. If the goal of the portfolio is capital appreciation or maximizing returns, then it may be improper for the fiduciary to recommend a significant allocation to U.S. treasury securities; however, if the goal of the portfolio is to maintain value, then recommending treasury bonds could be perfectly acceptable.

Trust governing documentation is another factor that a fiduciary typically considers prior to determining the suitability of an investment. Suppose a stock broker suggests to a trust to invest in Google just after its initial public offering; however, trust bylaws forbid it from investing in equity securities other than utilities. While the stock broker provided the trust with what we now know as a phenomenal investment, the fiduciary would not be allowed to execute the trade on behalf of the trust due to its bylaws. Governing documents may also place limits on asset allocations and portfolio rebalancing.

Hindsight Bias

Any decision can be subject to hindsight bias. Hindsight bias occurs when a past event appears obvious after the event has transpired. Making investment choices is extremely difficult and, especially, any “poor” or “missed” investments can be subject to hindsight bias. In investment portfolio breach of fiduciary duty disputes, the plaintiff has the benefit of hindsight, whereas the fiduciary (or defendant) is always looking at the portfolio or a specific investment in the portfolio in the present. In these instances, the issue is not investment performance but investment suitability.

An example of hindsight bias is the Great Recession in 2008. In the wake of the Great Recession, many institutions and individuals sued investment banks for not being able to project that a significant amount of junk bonds were wrapped up in mortgage backed securities and collateralized debt obligations would begin defaulting almost simultaneously. While in reality only very few investors utilized investment strategies to take advantage of the economic downturn.

The Great Recession example could be viewed by beneficiaries as either a “poor” or a “missed” investment opportunity. Investors who took short positions in collateralized debt obligations made millions; therefore, not investing in the short position exemplifies a “missed” investment opportunity. Alternatively, investors who took long positions in collateralized debt obligations lost big on housing market defaults; therefore, investing in the long position exemplifies a “poor” investment opportunity. Hindsight bias may lead plaintiffs to question why their fiduciary did not recognize either “poor” or “missed” investment opportunities, which can lead to a legal complaint. Thus, fiduciaries should be weary of the hindsight bias associated with a plaintiff’s complaint of breach of fiduciary duty.

Breach of fiduciary duty litigations are typically jury trials rather than bench trials. Jury trials can favor the plaintiff in cases where improper investments are alleged because, similar to the plaintiff, jurors are often subject to hindsight bias.[9] The fact that jurors are also subject to hindsight bias adds additional pressure on fiduciaries facing improper investment allegations.

Transparency and Documentation

One way for fiduciaries to protect themselves against allegations of breach of fiduciary duty is through transparency and documentation. Transparency and documentation of all fees that will be charged on the account can mitigate breaches of fiduciary duty for excessive fees. Documenting any and all proposed investments and transactions and the outcomes can help defend against a churning allegation. Documenting the outcome of any proposed investment or transaction may also aid in a defense against improper investment allegations based on hindsight bias. If the fiduciary documents why a particular investment was either made or not made, then it could remove the crux of the plaintiff’s complaint because it was documented at the time of the proposition.

Construction of the But For Investment Portfolio

While the logic behind the but for investment portfolio is relatively straightforward, the construction of a but for investment portfolio can be very complex depending on the facts and circumstances of the litigation. The but for investment portfolio is developed to demonstrate what the value of the disputed portfolio would have been but for the breach of fiduciary duty.

The but for investment portfolio is created on the date of the initial breach of fiduciary duty. The but for investment portfolio consists of securities that are appropriate for the trust. The but for investment portfolio is then analyzed over the economic damages period according to the facts and circumstances of the disputed portfolio. Economic damages are equal to the difference between the but for portfolio ending balance and the disputed portfolio ending balance.

There are numerous factors for the damages analyst to consider in the construction of the but for investment portfolio. These factors are generally considered with regard to the portfolio governing documents and, approved or understood policies for the disputed portfolio. These factors include the following:

• Economic damages period(s)
• An assessment of the breach or breaches of fiduciary duty
• Investment suitability/asset allocation
• Tax considerations
• Treatment of investment portfolio cash flow
• Frequency of rebalancing
• Application of fees/expenses

Failure to consider and incorporate these factors into the but for investment portfolio can result in a calculation of economic damages that is inconsistent with economic reality. Any of the above factors could be disputed as part of a litigation.

Often, the damages analyst will create multiple but for investment portfolios based on varying assumptions for the factors listed above. The multiple but for investment portfolios will be used in conjunction with the disputed portfolio to produce a range of economic damages that can assist the finder of fact in determining an appropriate measure of economic damages once the finder of fact opines on the contested issues.

Economic Damages Period

Defining the economic damages period is important for constructing the but for investment portfolio and, ultimately, providing an indication of economic damages. While this may seem straightforward, the economic damages period may be disputed. It is a common practice for legal counsel to advise the damages analyst to construct but for investment portfolios with different starting and ending dates to account for the unresolved economic damages period. The different dates add to the overall complexity of the damages analysis.

Assessment of the Breach or Breaches of Fiduciary Duty

There are certain instances when the timing and amount of initial damages from the breach of fiduciary duty is disputed.

Take, for instance. a claim of a breach of fiduciary duty due to a concentrated stock position. Typically, the stock position becomes concentrated because the investment outperforms the rest of the portfolio. If the portfolio does not have established rules for trading a concentrated stock position, it may be difficult for plaintiffs and defendants to agree upon a sale date, sale price, and percentage of the concentrated position sold. This variable alone can greatly influence the estimate of economic damages. The variation and the assessment of the initial breach of fiduciary duty adds to the overall complexity of the damages analysis.

Investment Suitability/Asset Allocation

The asset allocation decision is typically the greatest factor in determining the returns on a portfolio. Therefore, it is no surprise that the asset allocation decision is often contested in breach of fiduciary duty lawsuits.

Generally, investment portfolios with thorough, well-defined investment objectives and constraints provide acceptable asset allocation ranges. For instance, an asset allocation range could be:

• Cash and money market funds: 0–10 percent
• Fixed income securities: 40–50 percent
• Equity securities: 40–60 percent

In this simplified example, the damages analyst would likely create several but for investment portfolios with different asset allocations within the specified bands to assess a range of reasonable investment returns. In situations where there is (1) lack of clarity in portfolio governing documents and/or (2) a broad investment mandate, the range of asset allocation and investment suitability is much broader. In these instances, the range of economic damages for the but for investment portfolios can be extensive.

An additional consideration in the construction of the but for investment portfolio is the investment suitability and asset allocation may change over the economic damages period as investment goals and risk change. This consideration further complicates the construction of the but for investment portfolio.

Tax Considerations

Tax status of the trust needs to be considered over the entire economic damages period. The damages analyst may need to understand if there are any specific tax considerations in the disputed portfolio and incorporate certain tax strategies in the but for investment portfolio.

The tax profiles and characteristics of portfolios are generally in line with the tax profiles and characteristics of their trust beneficiaries. Therefore, it is important for the damages expert to consider not only the tax profile and characteristics of the but for investment portfolio, but also the tax profile and characteristics of the beneficiaries. Some of the factors that make up a tax profile are income level, adjustments to taxable income, exemptions and tax deductions, tax credits, and filing status. One thing for a damages analyst to note is that the tax profile of the but for investment portfolio may change over the economic damages period, similar to the changing tax profiles of the beneficiary over their lives.

Depending on the length of the economic damages period, the tax treatment for investment asset classes and tax environment for trust beneficiaries may change. This further complicates the but for investment portfolio analysis.

Treatment of Investment Portfolio Cash Flow

During the life of an investment portfolio, the investment portfolio will produce a level of cash flow from dividends, coupon payments, and distributions from its investments. The investment portfolio may distribute this income to beneficiaries, reinvest the income, or a combination of the two.

The investment portfolio may receive regular, periodic, or random contributions, and the investment portfolio may be asked to make distributions on regular, periodic, or random intervals to its beneficiaries.

As part of the but for investment portfolio, the damages analyst may need to make assumptions regarding the treatment of the various forms of investment portfolio cash flow. These assumptions will invariably influence the estimate of economic damages and the overall complexity of the analysis.

Frequency of Rebalancing

Rebalancing is the process used by portfolio managers to realign asset allocation weights in an investment portfolio. There are typically three methods for determining when to rebalance a portfolio: (1) time only, (2) threshold-only, and (3) a combination of time and threshold.

Time only rebalancing is when a fiduciary rebalances a portfolio at predetermined intervals to maintain the ascribed asset allocation. Time only rebalances typically occur on a monthly, quarterly, semi-annual, or annual basis.

Threshold only deals with the actual asset weights as a percent of the entire portfolio as they drift from the ascribed allocation based on market values. The threshold only rebalance occurs when the asset allocation crosses a predetermined threshold for the allocation. For example, if the ascribed asset allocation for the portfolio is to be 60 percent equity and 40 percent fixed income with a threshold of 10 percent, then a rebalance would be triggered at any time the equities account for more than 70 percent or less than 50 percent of the portfolio.

The third rebalancing strategy is a combination of threshold and timing. This strategy takes into account the predetermined times to rebalance and any allocation triggered rebalances. The combination rebalance is triggered by either the time since the last rebalance or by exceeding the threshold.

If the IPS has a clear method for rebalancing the portfolio, then that methodology, generally, is most applicable for the but for investment portfolio. However, in the case that the IPS does not have a well-defined method for rebalancing, then the damages analyst may consider the factors above and how they relate to the profile of the trust and the but for investment portfolio.

Application of Fees/Expenses

The but for investment portfolio will typically be adjusted for fees and expenses. The damages analyst may look at the fees and expenses stated in the IPS, or the damages analyst may need to consider market rates. If the fees and expenses in the IPS are well defined, then it may make sense for the damages analyst to use the fees and expenses as stated in the IPS. However, if the fees and expenses are not well defined, then the damages analyst may consider using market rates for the fees and expenses.

The disputed portfolio may be subject to AUM fees, performance fees, account fees, redemption fees, purchasing fees, transaction fees, and other fees/expenses. It is up to the damages analyst to understand whether the disputed portfolio fees are applicable to the but for investment portfolio. If the fee structure is disputed, it may be beneficial for the damages analyst to incorporate a sensitivity analysis for the range of appropriate fees and expenses charged on the but for investment portfolio.

Complex fee structures are not uncommon for investment portfolios; especially among actively managed funds and alternative investments. Complex fee structures add complexity to the construction of the but for investment portfolio. Take the case of a hurdle rate performance fee, one of the more common complex fee structures. If the disputed portfolio contains a hurdle rate performance fee, the damages analyst’s model should consider the possibility of the but for investment portfolio clearing a hurdle rate. Upon clearing the hurdle rate, the manager of the fund is rewarded for surpassing expectations. Therefore, the damages analyst may consider including the hurdle rate expense calculation in their model to avoid overstating economic damages. While the hurdle rate example was fairly straightforward, the fees and expenses are based on piece-wise structures, which can be much more difficult to model.

Conclusion

The but for test and its resultants (i.e., the but for investment portfolio) are generally accepted methods for calculating economic damages. The but for investment portfolio method is particularly applicable in legal cases involving breaches of fiduciary duty with respect to investment portfolios. While other methodologies for calculating damages in these cases exist, many fail to properly account for opportunity costs.

The but for investment portfolio in conjunction with the disputed portfolio is a useful method for measuring trustee breach of fiduciary duty damages and other damages. Due to the aforementioned complexities associated with the construction of the but for investment portfolio, an experienced damages analyst should be employed in this process.

Damages analysts often have the following important traits: (1) thorough knowledge of financial markets to interpret investment suitability; (2) expertise in financial modeling; and (3) the ability to interpret results in a cohesive manner for finders of fact. Valuation analysts typically demonstrate these three traits.

This article was previously published in Willamette Insights, Spring 2018 Issue; and FVLE Issue 73, June/July 2018. It is republished here with permission.

[1] Litvin, Michael. “But for test.” LII / Legal Information Institute. September 18, 2009. Accessed January 23, 2018. https://www.law.cornell.edu/wex/but-for_test

[2] Rolf v. Blyth Eastman Dillon & Co., 570 F.2d 38, 49 (2d Cir. 1978), cert. denied, 439 U.S. 1039 (1978), modifying, 637 F.2d 77 (2d. Cir. 1980).

[3] Miley v. Oppenheimer & Co., 637 F.2d 318, 318 (5th Cir. 1981), abrogated by Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213 (1985).

[4] Donovan v. Bierwirth, 754 F.2d 1049 (2d Cir. 1985).

[5] Orzeske, Benjamin. “Acts: Prudent Investor Act.” UniformLaws.org. (accessed January 23, 2018).

[6] Mary C. Burdette and Scott D. Weber, “Remedies for Breach of Fiduciary Duty” (Chapter 22) in 37^th Annual Advanced Estate Planning and Probate Course (Houston: State Bar of Texas, June 26–28, 2013).

[7] Hatrock v. Edward D. Jones & Co., 750 F.2d 767, 773-74 (9th Cir. 1984).

[8] U.S. Securities and Exchange Commission (2015). Blackstone Charged with Disclosure Failures. (online) Available at: https://www.sec.gov/news/pressrelease/2015-235.html (Accessed January 23, 2018).

[9] Hastie, Reid, Schkade, David A., and Payne, John W. “Juror Judgements in Civil Cases: Hindsight Effects on Judgements of Liability for Punitive Damages.” Law and Human Behavior Volume 23, no. 5 (October 1999). 597–614.

Nicholas J. Henriquez is a senior associate at Willamette Management’s Atlanta practice office.
Mr. Henriquez may be contacted at (404) 475-2317 or by e-mail to njhenriquez@willamette.com.

Kyle J. Wishing is manager at Willamette Management’s Atlanta practice office.
Mr. Wishing may be contacted at (404) 475-2309 or by e-mail to kjwishing@willamette.com.