We were recently hired by the defendant in a Southern District of New York breach of contract dispute to review and rebut the economic damages report of the plaintiffs’ expert in a multi-million dollar action alleging damages as a result of a common law breach of contract. The facts in the case were largely undisputed.
Background: In 2012, the plaintiffs entered into a purchase agreement to sell their interest in nine retail stores. Roughly half of the purchase price was paid in cash at closing and the other half was paid in the form of promissory notes. The defendant financed the purchaser’s acquisition of the stores wherein plaintiffs’ notes were subordinated to defendant. Plaintiffs alleged that the Defendant breached the terms of the subordination agreement by accepting the early pay-off and that “but-for” the breach, the purchaser of the stores would have had sufficient cash flow to pay all interest and principal on the subordinated notes.
Success: Our analysis demonstrated that the plaintiffs’ expert report was flawed in many respects and was critical in undergirding a Daubert motion to exclude the subject report. We were able to effectively show that the opposing expert’s report was overly speculative, employed methods that were not consistent with standard practice, and failed to demonstrate any of the damages pled by the plaintiffs. In fact, with a correct analysis we were able to show that the opposing expert presented no scenario where any payments on the subordinated notes could ever have been made to the plaintiffs and, therefore, that the plaintiffs sustained no damages. Based in part on our analyses, the defendant filed a Motion for Summary Judgement, which the Court ultimately granted giving a total victory to the defendant.
LVF Practice Group Profile
Our Litigation, Valuation, and Forensics Practice Group (LVF) continues to balance its practice between our three core service areas of litigation support, business valuations, and forensic fraud investigations. As a part of this practice, we are well experienced in complex business litigation and large white-collar fraud investigations for which we have served as testifying expert on many occasions.
Valuation work continues to be a fundamental issue in litigation, merger and acquisition consulting, and shareholder disputes. Our involvement in business transaction support services continues to grow as we continue to differentiate ourselves from traditional CPA firms as valued partners to attorneys, government investigators, and lenders.
While many traditional CPA firms are generalists when it comes to LVF services, we have committed to this practice space one hundred percent with professionals dedicated to this specialty area.