Matter of Weber—Challenges to a Trustee’s Accounting Go Awry Serving as a Trustee of a Trust is difficult. In the case presented, a trust beneficiary alleged that the trustee—his aunt—breached her fiduciary duty. The trust beneficiary retained an expert in connection to this claim and this did not go well for either the beneficiary or damages expert. The article summarizes the case, provides a road map and ...

Mancini v. UBS AG: Valuation of Collateral Pursuant to an Event of Default This article discusses the recent case of Mancini v. UBS AG, a case where UBS liquidated Plaintiff’s collateral following an event of default. The issue before the court was whether UBS AG acted arbitrarily when it liquidated Plaintiff’s account based on an earlier valuation date, rather than based on a higher and more recent account ...

Freedman Normand Friedland LLP v. Cyrulnik—On the Valuation of Contingency Fee Cases and Qualifying as a Fee Expert When there is a consistent and predictable stream of cash flows or a history of royalties for licensed intellectual property, the valuation professional is most comfortable. In the following case, the court addressed admissibility of a valuation expert who was attempting to value an alleged in ...

Connelly v. United States—Do Redemption Agreements Create a Business Liability? Most have some form of agreement and financing in place to address sudden changes in ownership. In Connelly v. United States, a unanimous U.S. Supreme Court may have turned many of those plans on their heads. The question before the Court was whether a redemption agreement created a liability to the company. The author discusses ...

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 ...

Watts v. Smith–Long-Term Means Long-Term In the business valuation world, valuators attempt to consider a benefit stream into perpetuity, which is a very long time. Sadly, many business owners have difficulty grasping long time periods as they execute agreements dealing with multi-generational ownership and family relationships. In Watts v. Smith, 2023 Ky. App. (Unpub.) (Ky. Ct. App. September 8, 2023), the ...

People of the State of New York v. Donald J. Trump et al. The recent lengthy court opinion in People of the State of New York v. Donald J. Trump et al., provides a cautionary tale to aspiring damages expert witnesses. In this article, Michael Molder synthesis the factors that persuaded and dissuaded the judge. It is axiomatic in the civil justice system that everyone is entitled to present their case as the ...

Rosenthal v. Erber illustrates the pressure and perils of dueling experts. The expert is charged with assisting the court ascertain the facts, rather than furthering the client’s ambition. The case is a reminder to business valuation professionals that ethical considerations are paramount and that doing the contrary leads to courts’ suspecting the role of experts in the process. In the main, valuation exper ...

The Perils of a Party Doing their Own Business Valuation in a Dissolution Action Kwak v. Bozarth is an unpublished Massachusetts case. The trial court made several decisions based on unavailable data. The case illustrates the perils of a party in a martial dissolution acting as their own expert and underscores the importance of how the standard of review affects an appellate panel’s review of the trial cour ...

A Sampling of What Construction Law Attorneys Say They Expect from Experts This article provides a summary of what attorneys, who are members of the Minnesota construction law section, heard at a recent CLE regarding what attorneys expect from experts. On June 13, 2023, Michael Gregory attended the Minnesota State Bar Association Alternative Dispute Resolution Section regarding the topic of “Solve the Probl ...

FRE 702—Challenging the Expert Witness: White Buffalo Environmental, Inc. v. Hungry Horse, LLC In modern litigation, expert witnesses have become nearly indispensable. As a result, motions to preclude those experts from testifying are almost inevitable. With the forthcoming amendment to Federal Rule of Evidence 702 clarifying both which party bears the burden of proof on challenging expert testimony and the ...

June 2023 What happens when an owner pays him or herself a non-market rate of compensation? This month’s legal update presents, Mekhaya v. Eastland Food Corp., 287 A.3d 395; 2022 Md. App. LEXIS 938 (Md. Ct. App. December 22, 2022). In that case, an appellate court discusses what can happen when owners use their control prerogatives to pay owner employees more than a market rate for the services they provide ...

May 2023 In the recent case of Munro v. University of Southern California, the issue raised there is when and whether can a Plaintiff proceed to trial on a new damages theory after the discovery deadline has passed. This article discusses FRPC 37, the federal rule of civil procedures that sets forth the standard for admitting or denying the admission of a new theory under the circumstances described above. ...

February 2023 In 1748, Benjamin Franklin famously said, “Time is money.” That concept provides the framework for the Florida Court of Appeals decision in Iarussi v. Iarussi. As often happens in marital dissolutions, the parties resolved many of their issues by agreement, but, when it came to the money, they needed the court’s assistance in dealing with the marital value of a privately owned business and cla ...

November 2022 The importance of consumer protection laws can seem unfathomable when you see a label on a sweater reminding you to remove the child before laundering, but laws prohibiting deceptive trade practices and false advertising exist because the incentives to run roughshod over consumers are significant. Since the individual harm resulting from consumer fraud is often small, those laws often provide ...

September 2022 This article summarizes Agnelli v. Lennox Miami Corp., 2022 U.S. Dist. LEXIS 125346, 2022 WL 2788875 (S.D.Fl. July 14, 2022). This state of Florida case shows that nepotism does not always work out so well. The case involves misappropriation of corporate money, fair value valuations, the use of discounts for lack of control and marketability, and statutory interpretation.  As Garry Marshall f ...

July 2022 This article focuses on Partner Reinsurance Co. v. RPM Mortgage, Inc., 2022 U.S. Dist. LEXIS 94244 (S.D.N.Y. May 25, 2022). This is a case of buyer’s remorse. The target’s financial condition changed dramatically after the LOI and buyer attempted to renegotiate the acquisition terms. This case illustrates how damages were calculated. Buyer’s remorse: everybody’s experienced it at one point or anot ...

May 2022 For more than 400 years, the limited liability protection of corporate entities has been perhaps one of the greatest accelerators of economic growth and capital formation in the industrialized world. Despite the benefits, corporations have also been used as vehicles to cheat creditors with bad guys hiding behind the “corporate veil.” Over time, courts have developed a strategy for creditors to “pie ...

April 2022 Two cases from Delaware and New York provide guidance to financial forensics and valuation professionals on the fiduciary duties that managers and directors owe to enterprises. The first case, In re: Multiplan Corp. Stockholders Litigation, is a class action arising from allegedly inadequate disclosure of a merger between a publicly traded special purpose acquisition company (SPAC) and a privatel ...

The Bankruptcy Court Weighs-in In Re: Body Transit, Inc. The Bankruptcy Court of the Eastern District of Pennsylvania In re: Body Transit, Inc. addressed how COVID-19 impacts valuations. On August 7, 2020, the Court heard and decided the case. This case proceeded under the Small Business Reorganization Act (SBRA) whereby the debtor’s objection to a creditor’s election to have its claim treated as fully secu ...