Healthcare Industry and Valuation Implications On June 28, 2024, the U.S. Supreme Court issued a seismic decision in which it explicitly overruled “Chevron deference,” limiting the ability of federal agencies to rely on their own interpretation of the laws they administer. This 6-3 ruling is expected to significantly impact the heavily regulated healthcare industry. The authors share their thoughts on how this decision may impact the healthcare industry and valuations. Chevron deference is a legal test established in the 1984 Supreme Court case, Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc.[1] In this case, the Court ruled that when…
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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. Through these experiences, I have gained insight that is not written in the books, or at least not the ones I have been reading as a forensic and valuation…
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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 expert witnesses in high-stakes litigation. Expert testimony plays a pivotal role in unraveling complex economic disputes. It is often one of the essential elements in dispute resolution. Why is that? Expert testimony brings specialized knowledge, technical insights, evidence interpretation, and factfinder…
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Memoirs of a CPA on Getting Started in the Valuation and Forensics Fields Edward Mendlowitz considers himself the last of the “expert generalists”. He published Memoirs of a CPA wherein he relates his story and the lessons learned. Over the years, the author has witnessed the trend towards specialization and proliferation of professional credentials. Mr. Mendlowitz started moonlighting almost immediately after graduating college in 1963 and had enough business to start his own practice in 1969. In this article, he shares tips for newly minted professionals. I consider myself the last of the “expert generalists” and published my Memoirs of…
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In the Analysis of Personal Goodwill In the sale of a C corporation in an asset deal, the sellers may argue that a portion of the purchase price is for personal goodwill so that the proceeds are not subject to double taxation. In the context of divorce, personal goodwill may not be a divisible asset, while enterprise goodwill is. This article discusses the quantification of personal and enterprise goodwill using the multi-attribute utility model (MUM). A key consideration in both the sale of closely held C corporations and valuations for marital dissolution purposes involves the existence and value of personal…
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A Call to Action E-mail is our front line of communication. And because of that, everyone’s inbox is overloaded. Of course, your e-mail is brilliant/critical/urgent/important. So how do you write an e-mail that gets opened and read? And if you read to the end, there’s a bonus e-mail tip you will want to try out. E-mail is our front line of communication. And because of that, everyone’s inbox is overloaded. Of course, your e-mail is brilliant/critical/urgent/important. So how do you write an e-mail that gets opened and read? And if you read to the end, there’s a bonus e-mail tip…
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Use in Private-Business Valuation (Part IV) In this fourth article, the authors show how to apply the IPCPL theory using public market cost of capital. Read Part I, Part II, and Part III Application of IPCPL Theory When Bob Dohmeyer, Pete Butler, and Rod Burkert published their article on the IPCPL in 2013, they developed a discount rate from the Deal Stats database. In 2015, we published an article in which we set forth that their incite that the difference between the cost of capital in a public market and private market is largely due to the difference in transaction…
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Lytle v. Nutramax Laboratories, Inc. et al.—Challenging a Proposed Class Action In Lytle v. Nutramax Laboratories, Inc., et al., 2024 U.S. App. LEXIS 9722; __ F.4th __; 2024 WL 1710663 (9th Cir. April 22, 2024), the court affirmed certification of a class of dog food purchasers alleging the defendants made fraudulent claims about the health benefits of the supplements they manufactured. Andy Rooney famously said, “The average dog is a nicer person than the average person.” He was almost certainly right, and because of that, many dog owners go to great expense trying to protect their dogs’ health. In Lytle…
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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 experts involved in the litigation support field. During almost every discussion regarding commercial damages (lost profits or business destruction), there is a comment about the discount rate applied for…
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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 financial position they would have been in had the incident not occurred. This article delves into the core elements of quantifying lost profits, providing insights into methodologies. Calculating lost profits is a crucial aspect of…