Experts Beware… Financial experts that handle construction defects claims should be familiar with the doctrine of economic waste, the potential limitations on a damages claim, and recognize the potential of this doctrine arising in a damages engagement. The author shares how this doctrine may arise and what to look for before accepting a damages engagement. “Economic waste is the label that courts have adopted as justification for not awarding an aggrieved party the cost of performance as damages for breach of a construction contract”.[1] This topic generally arises when a repair in a construction defect matter requires significant reconstruction or,…
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When All You Have is the Price for Many (Patents) It is rare for all patents included in portfolio license or sale agreements to have equal value. In a patent infringement case, the individual values of the patents are needed. So, when only a small subset of patents are at issue, how can we estimate their worth? This article provides insight as to how value can be adduced. It is rare for all patents included in portfolio license or sale agreements to have equal value. When only a small subset of patents are at issue, how can we estimate their…
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Through Pop Culture References It often takes more time and skill to explain something simply and shortly and less time to use a lot of words, spreadsheets, and technical jargon. Nevertheless, pop cultural references can be used to quickly crystalize issues because many people are familiar with them and their underlying meaning. This article identifies some pop cultural references that can be used to help resolve or explain valuation disputes. Introduction “If you can’t explain it simply, you don’t understand it well enough.” This statement may appear to be a paradox, like another famous Introduction “If you can’t explain it…
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For Business Valuations Accounting Standards Codification (ASC) Topic 842: Leases is the lease accounting standard published by the Financial Accounting Standards Board, which replaces prior guidance from ASC Topic 840. ASC 842 brings previously off-balance sheet operating leases onto a company’s balance sheet. The new standard takes effect for private companies in fiscal years starting after December 15, 2021, and represents a fundamental change to financial statements, which are the foundation of business valuation analyses. This article will focus on potential impacts to a valuation analysis because of the change in accounting standards. Accounting Standards Codification (ASC) Topic 842: Leases…
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At a Deposition or Court Hearing To begin to understand the subject, we must point out that the “Reglas de Evidencia de Puerto Rico” (the Puerto Rico Rules of Evidence) and the Federal Rules of Evidence adopted in the district of Puerto Rico—which is part of the Second Circuit Court of Appeals—allow for expert testimony to be inserted into the “record” of a case in a deposition or in a court hearing, are basically the same. This article covers the significance of the Daubert standard and provides a summary of rules to temper the expert that does not feel constrained…
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This article builds on the author’s May 11, 2022 “Being Different is More Profitable Than Being Better” article. In this article, the author provides five questions that my enable one to differentiate oneself from the competition. How do your clients think you’re doing? You don’t know unless you ask. Because knowing what they want and then giving it to them is the easiest (if not the best) way to stand out. This week’s topic builds on my last QR article Being Different is More Profitable Than Being Better. Towards the end of that article, there were some suggested questions we…
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How to Avoid Them! A 409A valuation refers to a method of determining the value of a company’s common stock. In other words, the 409A valuation is a method of calculating fair market value (FMV) according to the regulations under the Internal Revenue Code (IRC). This valuation can be carried out using various types of valuation methodologies, however, it is important to avoid pitfalls in 409A valuation when carrying out the valuation to obtain a more accurate result. In this article, we will discuss some of the most common mistakes that can be made when carrying out a 409A valuation,…
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Two Major Approaches Adopted by Courts Assessing Claims This article discusses the challenges that COVID-19 and other recent catastrophes present when calculating business interruption claims. It surveys the two common approaches adopted by courts, examines their outsized impact on an insured’s recovery, and discusses how the influx of new decisions will change the business interruption landscape. It also analyzes how the underwriting process is evolving to account for the economic impact of these recent disasters. Courts across the globe are flooded with business interruption insurance claims arising out of the COVID-19 pandemic, extreme weather events, cyberattacks, and other catastrophes. COVID-19…