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In wrongful death cases, economic damages generally are equal to the current value of the expected future earnings of a decedent but for the defendant’s wrongful act. However, estimating such damages is easier said than done. Even relatively straightforward cases require experts to extrapolate earnings over the decedent’s worklife expectancy and account for the value of employee benefits. Special circumstances – for example, when the decedent is a child or stay-at-home parent – can make estimating economic damages particularly tricky. Historical Earnings Matter Typically, valuation experts begin their calculation of economic damages by analyzing the decedent’s earnings history and extending […]

Occupational fraud continues to wreak havoc on businesses around the globe, with annual losses for the typical organization estimated by the Association of Certified Fraud Examiners at 5% of revenues. Fraud experts have long suggested that the presence of three conditions, known as the “fraud triangle,” greatly increases the likelihood that an organization will be defrauded. And, over the years, some have suggested additions to the triangle. Classic Shape The classic fraud triangle, as conceived by criminologist Donald Cressey, consists of: Pressure. A perpetrator experiences some type of pressure that motivates the fraud. Pressure can come from within the organization […]

Helping Your Clients Realize the Best Deal After years of sluggish activity, the merger and acquisition (M&A) market has picked up dramatically. Some of your clients may have indicated that they are thinking of selling their businesses or making acquisitions. In addition to legal advice, they are going to need financial expertise. Help them understand that, to successfully close an M&A transaction, they will likely need a team of experienced advisors. Early Stages Financial experts are able to assist business sellers in the early stages of an M&A deal in several ways. An expert can help an owner establish realistic […]

Lisa Jaffee, a Risk Control Consulting Director at CNA (a national malpractice insurer), has alerted attorneys of a sophisticated scam being perpetrated against their attorney trust accounts. In her most informative, three-part blog titled “Look Out, Lawyers! Targeted Scam Could Pose Threat to Wire Funds: Help Prepare Your Business” she explains how the scam works: First, the fraudster hacks into the attorney’s email account and monitors the activities. The fraudster is most interested in emails from the attorney to clients discussing the pending release of client funds. Next, the fraudster creates a fake email address, closely resembling that of the […]

Valuation can play an essential role in the bankruptcy process. Yet not every valuation expert is qualified to work on bankruptcy matters. Whether they are working on the debtor or creditor side, attorneys need to understand how valuators can contribute and ensure that their experts are qualified for the job. Major Issues Valuation professionals can provide extensive services in bankruptcy matters. Generally, a newly engaged valuator starts appraising the debtor business, ownership interests and tangible and intangible assets. From there, the expert might provide independent opinions on such matters as financial fairness, reasonably equivalent value and sale price, as well […]

If you’ve ever reviewed a business valuation for a client, you know that the final value usually includes several components — including tangible and intangible assets. The term “intangible assets” often triggers thoughts of intellectual property, such as patents or copyrights. But licenses and permits that allow a company to do business also fall into this category, and can carry significant value. Permission To Perform A license generally is defined as governmental or other authorization to perform certain acts —for example, sell regulated goods (such as pharmaceuticals or alcohol) or operate in regulated industries (such as food services or firearm […]

A discount for lack of marketability (DLOM) can dramatically reduce a business’s value, in turn reducing the amount a spouse receives in a divorce case. But the likelihood of a business’s sale may determine whether such a discount is even appropriate. In a recent divorce action, Barnes v. Barnes, the court of appeals found that a DLOM on the husband’s dental practice was improper because he had no need or desire to sell his interest. Multiple valuation methods The husband in the case owned a dental practice consisting of himself, an associate dentist and several employees. In 2003, the husband […]

Hardly a day goes by when copyright infringement isn’t in the news. In past years, for example, a couple of music industry heavyweights were charged with plagiarism. The family of Marvin Gaye took pop star Robin Thicke and his co-writers of the hit “Blurred Lines” to court for plagiarizing the late soul singer. And 2015 Grammy winner Sam Smith settled with musician Tom Petty after the latter accused Smith of borrowing from one of his songs. Your clients may not be rock stars, but if their copyrighted assets are infringed, they’re entitled to seek damages from the infringer. A damages […]

Claims fraud: It’s not just for insurance companies anymore. These days a variety of businesses deal regularly with claims that present the opportunity for fraud, ranging from false health care and other benefits claims to dishonest rebate and warranty claims. The good news is that qualified fraud experts can help all types of companies come out on top. Four Hurdles to Clear Technological advances over the last decade or so have given rise to the emergence of applying predictive analytics to existing data sets — creating a powerful tool for combating fraud when in the right hands. To make the […]

Many businesses depend on inventory to survive. But inventory items — from raw materials used to manufacture products to finished goods marked for sale — have a way of disappearing from worksites. The good news is that timely detection and prevention measures can help prevent inventory fraud and its financial repercussions. Small stakes Inventory fraud generally involves either 1) the theft of physical inventory items for resale or personal use or 2) misstatement of inventory. Most schemes fall on the smaller end of the scale, such as returned goods schemes in which dishonest people return merchandise after using it or […]