Category Archives : Litigation

New Businesses: Building the Case for Lost Profits

Courts recognize that a plaintiff shouldn’t be precluded from recovering lost profits where the defendant’s actions have prevented the plaintiff from establishing a track record. But the methods typically employed to calculate lost profits damages may prove tricky when the case involves a new or unestablished business. This article talks about the methods typically employed […]

How to Bolster Your Clients’ Prenuptial Agreements

These days, prenuptial agreements aren’t just for Hollywood stars and Wall Street moguls. With divorce rates remaining high and blended families on the rise, more of your clients are likely taking a pragmatic approach to marriage. With the input of a CPA, prenuptial agreements can affirmatively define spouses’ financial rights, duties and obligations. Properly drafted, […]

Taking a Byte Out of Crime – An introduction to computer fraud

Computer operations are particularly vulnerable to fraudulent manipulation. This article reviews some of the more common types of fraud. Virtually every phase of computer operations is vulnerable to fraudulent manipulation. A particular phase may serve as the ultimate target of a fraud scheme, a tool in the commission of the scheme or both. While computer […]

Solving an Accounting Whodunit

Fraud costs U.S. businesses nearly $600 billion each year. While most business owners are aware of the problem, few imagine that they will fall victim to fraud. Unfortunately, many will. To uncover the facts when clients suspect employee fraud, attorneys often call on the services of forensic auditors, or fraud examiners. The following are some […]

Reasonable Royalties and Lost Profits Damages Help “Cure” Infringement

Patent infringement litigation is becoming increasingly common. When it comes to damages, reasonable royalties represent the statutory minimum, but plaintiffs often are able to recover greater amounts in the form of lost profits. How these damages are determined depends on a variety of factors. Intellectual property is playing a critical role in today’s technology-driven world. […]

Employee Fraud: Forewarned is Forearmed

A 2004 annual study of occupational fraud by the Association of Certified Fraud Examiners (ACFE) reveals that fraud has a disproportionate impact on smaller businesses. Its results also indicate that asset misappropriation is the most common type of fraud, but fraudulent financial statements are the most costly. This article shows how the study can help […]

Discounting Future Damages to Today’s Dollars

Selecting an appropriate discount rate involves an element of subjective judgment, which can lead to dramatically different damage calculations. This article explains how an understanding of the basics of discounting helps build a strong case in support of damages positions. Plaintiffs often seek damages for future losses — such as lost profits — expected to […]

Carefully Drafted Settlement Can Minimize Bankruptcy Risks

The peace of mind that comes with settlement can quickly be extinguished if the defendant files for bankruptcy. This article discusses how attorneys should take bankruptcy laws into account when drafting settlement agreements. The peace of mind that comes with settlement can quickly be extinguished if the defendant files for bankruptcy, even if full payment […]

Breach of Contract Damages Go Beyond Lost Profits

Lost profits may come to mind first when contemplating damages for breach of contract. This article reveals, however, that several other available remedies should also be kept in mind, including other compensatory damages, incidental and consequential damages, attorneys’ fees and costs, rescission, and reformation. Breach of contract damages go beyond lost profits In commercial cases […]

Antitrust Litigation Demands Sophisticated Economic Analysis

Antitrust cases present a number of complex issues involving both liability and damages, and both areas demand comprehensive economic analysis. Proving causation is a particular challenge, requiring more than a positive correlation between the defendant’s alleged misconduct and the plaintiff’s claimed injury. This article gets into the details. Antitrust litigation demands sophisticated economic analysis Almost […]

AICPA Offers Guidance on Fighting Fraud

A new AICPA publication outlines six key steps audit committees can take to combat one of the most significant and costly fraud risks: management override of internal controls. This article provides a summary of this important release. In response to widely reported financial reporting frauds, the American Institute of Certified Public Accountants (AICPA) has published […]

Proving Lost Profits

Abstract: Establishing lost profits, particularly for new businesses that haven’t yet compiled any historical financial data, can be extremely challenging. In such cases, courts sometimes rely on data from comparable businesses. But as a recent New Jersey appellate court case illustrates, true comparability between the businesses is critical. A restaurateur who chose to testify on […]

Broke or Dishonest? Uncovering alter ego companies

Chrysler’s and GM’s recent bankruptcy filings were very public examples of a much broader insolvency trend that cuts across all industries and market capitalizations. Most companies filing for bankruptcy accurately represent their assets. But a small percentage of filers that claim to have little or nothing to offer creditors aren’t being honest. Instead, they’ve diverted […]

Show me the money

Tracing hidden business assets Distrust is typically part and parcel of divorce litigation — especially when it comes to financial matters. To secure a fair and equitable resolution, attorneys may need to trace assets and income that a business owner spouse has hidden to reduce child support, alimony liability or the final settlement amount. Forensic […]

The trouble with start-ups and never-started-at-alls

Lost profits damages The trouble with start-ups and never-started-at-alls Although calculating lost profits damages for businesses involved in litigation is always complicated, damages experts can use the company’s historic financial statements to make their projections. They can, that is, if the business has a history. Calculating damages for early-stage and never-launched businesses requires a different […]

Double vision: Analyzing alter ego liability

Abstract: Financial experts play a critical role in alter ego litigation, examining a wide range of factors to analyze whether a company is a shell or a legitimately separate entity. This article explains how the expert looks at what’s going on inside the companies to determine whether the ownership structure serves legitimate business purposes or is […]

Recovering the lost profits your clients deserve

Lost profits are a key component of damages in all kinds of litigation. In breach of contract and commercial tort cases, for example, a plaintiff may claim it suffered lower revenues, higher costs or both because of the defendant’s wrongful conduct. To accurately calculate lost profits, financial experts consider a number of factors, including lost […]