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 by expert witnesses. This 16th article of the unimpeachable neutrality series will take a deeper dive into the potential implications surrounding the up-and-coming amendment to Rule 702 and common risks that this amendment may…
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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 by the business owner’s legal counsel. 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.…
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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 storage and retrieval techniques, and the ‘076 patent related to restricting user access. As the case proceeded to the damages phase, MicroStrategy filed a motion to exclude certain opinions of Daedalus’ damages expert, Jim W. Bergman, under Daubert and Federal Rule of…
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A Review of the Basics for Lost Profits (Part VI) The first five installments of this series have been a review of the basics for calculating lost profits. In the series, lost profits was defined, the common methods used for calculating lost profits (yardstick, before and after, sales projections, market) were discussed, the court standards for assessing lost profits (foreseeability, proximate cause, reasonable certainty) were reviewed, the way of discounting future lost profits to present value was presented, modeling lost profits calculations and how these factors impact the discount rate were discussed. In addition, this series has addressed the differences…
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Admissibility of Expert Witness Testimony and Reliability of Methodology On April 24, 2023, the Supreme Court of the United States approved two amendments to Rule 702. The language of these amendments was modified slightly from the language of the proposed amendments approved by federal judiciary’s Advisory Committee on Evidence Rules. This article discusses the amendments and how the changes will impact the admissibility of expert witness testimony. On December 01, 2023, new amendments to Rule 702 of the Federal Rules of Evidence will go into effect that will impact the admissibility of expert testimony. These amendments concern the standard for…
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Consideration of Adultery in a No-Fault State and Elimination of Permanent Alimony (effective in Florida as of July 01, 2023) Florida has eliminated permanent alimony. This article discusses this change in the law, including the new alimony structure, consideration, burden of proof, and fact that the court now is allowed to consider adultery in determination of support. More than 200 laws passed in the recent 2023 Florida legislative session including: HB[1] 543, which allows Floridians to carry guns without concealed weapons licenses;[2] HB 1305, which sets requirements for the Florida Department of Transportation to conduct inspections of the Walt Disney…
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The Vital Role of Seamless Internal Communications When occupational fraud occurs within an organization, it is not a surprise that the root cause of the fraud was due to deficient internal controls. However, what does “internal controls” mean to all parties involved at an organization? Accountants should know what “internal controls” are, but does this concept resonate with the personnel within the sales or operations departments? Perhaps not. This article discusses the importance of having all members of the organization involved in the internal control process. Internal Communication and its Impact on Fraud Prevention When occupational fraud occurs within an…
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Theory to Practice VPS StraightTalk Webinar, June 15, 2023 This article summarizes key takeaways from the June 15, 2023, VPS StraightTalk Webinar presentation co-led by R. James Alerding, CPA, ABV and Carli D. Lehr, CPA, CVA, CSEP. The speakers discussed how to differentiate between a projection and forecast, the importance of developing a reliable cash flow or projection evaluation of specific risk to the overall valuation, lessons from court cases regarding the use of forecasts, and what valuation standards say about the use of prospective financial information in business valuations. This article summarizes key points. Business valuation analysts spend a…
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An Interview with Zain Kalson, founder of Etheia As part of a broader dialogue around business valuations in the context of divorce, this article features an interview conducted by Andrew Thompson, Esq., with Zain Kalson, the founder of Etheia. The article discusses trends regarding how advanced data analytics are helping attorneys and experts sort through hidden assets, analyze expenses, and improve outcomes in marital property divisions. As part of a broader dialogue around business valuations in the context of divorce, I (Andrew or “Drew”) recently had the opportunity to sit down with Zain Kalson (“Zain”), the founder of Etheia, and…
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Currency Investment Scams Step aside e-mail compromises and romance scams. Make way for the crypto investment scam, the newest in an ever-changing sea of schemes and scams available on the World Wide Web to minimize your life savings in as little as a few weeks. This article is a refresher for traditional indicators beyond the “too good to be true” mantra and will detail the slight modifications occurring within this new iteration of attempts to separate folks and their money. There are 12 common investment fraud scheme indicators to recall. These may occur prior to a potential victim engaging in…
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An Unimpeachable Cure for Delusive Exactness This 15th article of the unimpeachable neutrality series discusses the pathology, symptoms, and treatment for a bad case of delusive exactness. Delusive exactness affects thousands of financial experts every day and can be fatal to a case if left untreated. On balance, delusive exactness, as described herein, refers to the testimonial delirium exhibited by a financial expert witness that overstates the strength of their conclusion of damages or value beyond that which can or should reasonably be drawn from the application of the methods, data, or sources of information relied upon, considered, or applied…
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A Primer for Business Valuation, Forensic, and Litigation Support Professionals This is the first article in a series related to the cryptocurrency valuation and litigation. This is an emerging area of practice. In this first article, the author explains what is a blockchain and the purposes blockchains serve. Cryptocurrency litigation in the past decade has appeared in various dispute types: Matrimonial disputes where property characterization, asset concealment, and valuation are key components of the forensic practitioner’s work product; In civil disputes where a lack of professional skepticism, an over-reliance on 409(A) valuations, and subversive explanations are key pitfalls of a…
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Business Revolution, Ethical Implications, Strategies for Business, and the Path Forward In this article, the authors examine the fine line between the unparalleled benefits of AI and its potential pitfalls. The authors advocate for a future where humans and AI work together harmoniously, driving innovation, productivity, and long-term success in an increasingly competitive global landscape. As professionals continue to develop and utilize AI, it is essential to remember that it is a human creation, designed to enhance humanity. AI should remain a tool for human betterment, augmenting our capabilities rather than replacing them entirely. This said, there are risks and…
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Avoiding Speculation The author of this article, Dr. Kreuter, recently testified in a jury trial in New York State Supreme Court. The case was heard in April 2023. In the case, Kela Tennis, Inc. (“Kela”) sued the City of Mt. Vernon (“Mt. Vernon” or “the City”). On behalf of Kela, Dr. Kreuter calculated the economic damages in connection with the City’s breach of contract with Kela. The City had wrongfully destroyed the tennis bubble Kela had operated, leading to severe losses. This article explores the method used to compute damages, which included careful consideration of partially offsetting mitigation, a reasonable…
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A Review of the Basics for Lost Profits (Part V) This is the fifth article in a series reviewing the basics for lost profits. When calculating lost profits, some assignments will show results with future lost profits. The future lost profits must be discounted to a present value. This article will review issues relating to discounting future lost profits to their present value. The topics discussed will be (1) from what date to discount losses, (2) ex ante and ex post approaches, (3) modeling or not modeling projections of future losses, and (4) the appropriate discount rate. This is the…
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Relief for the Tenant? Grief for the Landlord? With an anticipated increase in brick-and-mortar retailer bankruptcies, landlords may find themselves with little control over the future of their leases with bankrupt retailers. The Bankruptcy Code was designed to provide a “fresh start” to debtors whose balance sheet was weighed down by too many obligations, too little income, or insufficient cash flow. A debtor demonstrating a reasonable likelihood of a successful reorganization may be entitled to rid itself of costly real estate leases. But what are the rights of the landlord? A recent decision in the Southern District of New York,…
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A Synopsis of Valuation Brief 1 “Understanding the Differences: Conclusion of Value vs. Value Calculations” Valuation Brief 1, “Understanding the Differences: Conclusion of Value vs. Value Calculations” attempts to unpack the differences between that which is a conclusion of value and that which is not. In this 14th article of the unimpeachable neutrality series, the author provides a synopsis of the key takeaways from the inaugural valuation brief for which he had the pleasure of being a co-author. Society has evolved and perhaps devolved such that labels are becoming increasingly more important. From preferred pronouns to politically correct labels that…
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A Review of the Basics for Lost Profits (Part IV) This is the fourth article in a series reviewing the basics for lost profits. Important in any assignment for calculating lost profits is understanding standards set by the courts. The three standards that courts use in assessing lost profit calculations are foreseeability, proximate cause, and reasonable certainty. In this segment, these court standards for providing a lost profits analysis are reviewed. Read Part I, Part II, and Part III. This is the fourth article in a series reviewing the basics for lost profits. In this segment, the court standards for…
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New Year, Neutrality It is incumbent upon those who attempt to become or remain as “thought leaders” to sometimes put some thought into what is written. This said, this 13th article of the Unimpeachable Neutrality Series will cover some of the basics of what exactly “unimpeachable neutrality” is and how it is just as valuable and necessary in 2023. I received a phone call from a distressed member the other day. I could tell they were younger, maybe late 20s. They described a situation that they could not define but I was very familiar with. The member described being in…
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Navigating the Data While cryptocurrency has become more common, it has not lost its volatility. This article focuses on the risks of the rapidly growing cryptocurrency marketplace and what tools and capabilities are needed to protect companies from future crises that may emerge. Introduction Fortune favors the brave. That is what many have come to believe as cryptocurrency has soared into mainstream consciousness over these past two years. With cryptocurrency companies spending over $2 billion on advertising via Super Bowl commercials, celebrity endorsements, and even arena purchases (thanks for the memories, Staples Center), it is no wonder that more and…