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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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…
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End of Life or Another Day at the Office? One of the most concerning communications for experts to receive from a hiring attorney is the opposing attorney has filed a Daubert motion to exclude their opinion. Going through a Daubert challenge is stressful for even experienced experts. This article will discuss the Daubert decision and its impact on experts. It will also address questions considered by courts regarding an expert and their work. Finally, the author will discuss his experience with Daubert challenges, the process, and working with the hiring attorney in defending the expert’s opinions. One of the most…
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Show Your Workings! Many engagements to determine or rebut a lost wages claim include many elements established by the expert. This article focuses on the tax aspects of an award, specifically, how should the plaintiff receive a tax component award and, if so, how should this award be calculated. Many engagements to determine or rebut a lost wages claim (in an alleged wrongful termination, improper denial of promotion, wrongful death, or other such litigated dispute involving individuals) have the following elements established by the expert: Establishing the chronology of events; An assumption of the defendant’s liability; Analyzing lost earnings and/or…
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Three Experts Convene to Answer and Discuss Pressing BV Issues On March 1, 2022, Jim Hitchner hosted a webinar that featured Michelle Gallagher and Z. Christopher Mercer. While the respective speakers provided some questions in anticipation of the webinar, the audience sent questions and these were answered. The unscripted webinar provided attendees an opportunity to assess what was foremost in the mind of BV professionals. On March 1, 2022, Jim Hitchner hosted a webinar that featured Michelle Gallagher and Z. Christopher Mercer. While the respective speakers provided some questions in anticipation of the webinar, the audience sent questions and these…
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Changes in the Methods of Dispute Resolution In this article, Steven I. Platt, a retired Maryland Circuit Court judge, founder of The Platt Group, Inc., and QuickRead’s newest editorial board member, shares with readers the changes he sees affecting civil court proceedings, rise of alternative dispute resolutions, and opportunities that are becoming available to credentialed business valuation and financial forensic professionals. Traditionally, our citizens have had their disputes (legal and factual) resolved by a judge or jury in a courtroom. There, the role of the “Expert” has historically focused on assisting the trier of fact, be it a judge or…
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Assess the Extent of Real or Attributed Power and Consider the Source of Power to Develop a Negotiation Strategy Power, whether real or perceived, can influence negotiations, and comes from several sources: privilege, intimidation, withholding resources, etc. When preparing for a meeting with others to resolve a controversy or dispute, it is important to consider the power sources of all the participants. This article examines the source of power and extent of that power may help with developing a negotiation strategy. Power, whether real or perceived, can influence negotiations, and comes from several sources: privilege, intimidation, withholding resources, etc. When…
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What Forces Drive the Competition in the Industry? The author of this article shares his thoughts on the book, Competitive Strategy: Techniques for Analyzing Industries and Competitors. This was a book he had read sections of during his university days, but this time around, read it with a new vantage point considering his education and experiences since then; particularly in the business valuation field. He notes that Porter reminds the reader of an important question: “What forces drive the competition in the industry?” and observes in the litigation reports this question is often not addressed. This is a potential problem…
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Revisiting the Energy Capital Corp. v United States Case Causation It is important for the research and literature in our field to advance. Books, articles, and presentations help us improve and perfect the work we provide to the courts. It is also important that we review the history of our field to remind us “why we do things the way we do.” When reviewing the Energy Capital Corp. v United States case, financial experts will find several discussions regarding calculating lost profits that continue to provide a guide for other court opinions. This article will review three of those discussions:…
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A Review of Everett P. Harry, III and Jeffrey H. Kinrich’s 2022 Second Edition In 2017, Everett P. Harry, III and Jeffrey H. Kinrich released Lost Profits Damages: Principles, Methods, and Applications. Their purpose in publishing the book was to provide a comprehensive reference guide to cover important topics relevant to determination of lost profit damages. This book review discusses the second edition released in late January 2022. In 2017, Everett P. Harry, III and Jeffrey H. Kinrich released Lost Profits Damages: Principles, Methods, and Applications. They published this first edition to provide a comprehensive reference guide to cover important…
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Citation Omitted What makes the world of expert witness services so daunting at times is the fact that so much goes unsaid, untaught, or undefined. For example, the most recent international glossary used by valuation and appraisal professionals across the globe does not define what a conclusion or opinion is. Since saying the silent part out loud seems to be the popular thing to do, this tenth article of the Unimpeachable Neutrality series will attempt to cover the most pertinent unspoken rules of being a financial expert that you might not find issued, published, promulgated, or cited as authoritative. As…
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Delicate Balancing (and a Backbone) Required Rarely does a week pass in white collar and investigation or SEC-regulatory outside counsel life that an auditor or government enforcement attorney does not request some form of interim or final read-out or update. These requests for information can encompass investigative process and factual findings, lists of search terms, interview outlines, or similar investigative materials. However, this information, if provided, presents a very real risk of privilege waiver. This article encourages pushback against the “nobody else ever fights us on this” contention often heard from government enforcers and outside auditors wanting to “better understand”…
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Ask the Right Questions to Elicit the Information Needed for the Story Those that cross-examine and have been cross-examined understand that the questions are intended to elicit information or develop a story that fits their client’s version of events. There is a strategy and, in this article, the author shares how that is accomplished. So, what is the big deal about asking questions? You just say, “Why did you do that?” or “What is going on?” or “How is the project going?” Well, the “big deal” about questions, is to first understand the purpose. Are you trying to get the…
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A Fair Payout or a Disaster Waiting to Happen In 2020 alone, approximately 7,300 companies filed for Chapter 11 bankruptcy. Of those corporate debtors, 42 were found to have awarded pre-bankruptcy retention bonuses to a total of 223 executives, with the bonuses totaling approximately $165 million. These pre-bankruptcy bonuses were given to executives anywhere from five months to two days before the filing. Virtually none of the bonuses paid were approved by a court. Although these pre-bankruptcy bonuses seem like a minority among the 2020 Chapter 11 cases, they have been the topic of much recent discussion surrounding insolvent corporations.…
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To Create a Visual Picture Every profession has its own unique vocabulary, and although everyone in the field understands the terms or abbreviations, the public most likely does not. An easy way to help people understand technical terms or a profession’s distinctive vocabulary is to create a “word picture” that links that unique word to some everyday idea or object. The author suggests that metaphors and similes are keys to enabling the client to make these connections. Every profession has its own unique vocabulary, and although everyone in the field understands the terms or abbreviations, the public most likely does…
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A Unique Take on Causation Experts are becoming aware of how the COVID-19 pandemic has affected lost profit analyses that include 2020 and 2021. The pandemic and the slow recovery have created separate causations which may or may not become the proximate cause of a damaged business’ loss. For this reason, the effects of COVID-19 must be considered as an alternative causation to lost profits. The lockdowns across the country, the shuttering of non-essential businesses, and the overall fear which gripped the nation even as the economy was reopening caused a loss of revenue and profits to many businesses and…
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The Pursuit of Equitable Relief, Separation of Liability, and/or Innocent Spouse Relief The consideration of innocent spouse relief, separation of liability, and equitable relief remedies are important to understand and consider for the purposes for which they were created. This article presents the different options and when one option may be more fitting than another and the relief accorded under each. The merging of two individuals’ lives into the union of marriage has familiar practices: shared checking accounts, title to the marital home, and the filing of a joint tax return are a few of the more common mergers. The…
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Avoiding the Chaos and Selecting the Proper Methodology Over the past 20 years, business valuation analysts (and the courts) have debated whether there is an S corporation premium vis-à-vis the C corporation. This debate has led to the profusion of models and confusion. Four predominant models currently in use include: the Fannon, Delaware MRI, Van Vleet’s SEAM, and Treharne Model. Each of these models makes a different assumption. As for the similarities and differences of the four models, James Hitcher in this September 30, 2021, VPS StraightTalk Series primarily focused on Van Vleet, Delaware MRI, and Treharne model. The webinar…
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Natural Disasters and Claims Submission Best Practices This article’s purpose is to alert practitioners to potential issues that may arise during the claims process as it relates to damages suffered from a catastrophic event, other than COVID-19, during the ‘pandemic economy. Readers need to be aware of and distinguish the two events when filing a claim. Because the influence of the ‘pandemic economy’ on businesses is ongoing, and in many instances specific to industries and geographic locations, practitioners need to be able to isolate the financial components of each and be prepared to articulate if and how the coronavirus impact…
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From Beginning to End The authors of this article discuss what happens when credit card data is stolen and personal identifiable information is stolen. They recount how this information is used and sold on the dark web and the issues that arise when damages are claimed. The case of Target Corporation Data Security Breach Litigation, Attias et al. v. Carefirst, Inc., and Wawa provides context and insight on what must be proven and how damages are calculated. Ever ponder what happens when credit card data is stolen? I am not referring to the theft of your credit card from a…