Measuring Business Interruption Losses and Other Commercial Damages, 3rd Edition

Table of contents

1. Cover
2. CHAPTER 1: Introduction
   1. Development of the Field of Litigation Economics
   2. Development of the Field of Forensic Accounting
   3. Qualifications of an Economic Expert
   4. Qualifications of an Accounting Expert on Damages
   5. Interdisciplinary Nature of Commercial Damages Analysis
   6. Difference Between Disciplines of Economics and Finance
   7. Finding a Damages Expert
   8. Critically Reviewing a Potential Expert’s Curriculum Vitae
   9. Getting the Damages Expert on Board Early Enough
   10. Courts’ Position on Experts on Economic Damages
   11. Standards for Admissibility of Expert Testimony
   12. Exclusion of Experts
   13. Trends in Daubert Challenges to Financial Experts
   14. Expert Reports
   15. Defense Expert as a Testifying Expert, Not Just a Consultant
   16. Quantitative Research Evidence on the Benefits of Calling a Defense Expert
   17. Treatment of the Relevant Case Law
   18. Legal Damage Principles
   19. Other Types of Damages Cases
   20. Summary
   21. References
3. CHAPTER 2: Economic Framework for the Lost Profits Estimation Process
   1. Foundation for Damages Testimony
   2. Role of Assumptions in Damages Analysis
   3. Hearsay
   4. Approaches to Proving Damages
   5. Causality and Damages
   6. Using Demonstrative Evidence to Help the Client Understand Its Losses or Lack of Losses
   7. Causality and Loss of Customers
   8. Graphical Sales Analysis and Causality
   9. Causality and the Special Case of Damages Resulting from Adverse Publicity
   10. Length of Loss Period: Business Interruption Case
   11. Length of Loss Period: Plaintiff Goes Out of Business
   12. Length of Loss Period: Breach of Contract
   13. Methodological Framework
   14. Summary
   15. References
4. CHAPTER 3: Economic Analysis in Business Interruption Loss Analysis
   1. Economic Fluctuations and the Volume of Litigation
   2. Macroeconomic Analysis
   3. Definition of a Recession
   4. Measuring Economic Growth and Performance
   5. Business Cycles and the Movement of GDP Components
   6. Business Cycles and Economic Damages
   7. Varying Responses to Business Cycles Across Industries
   8. Using More Narrowly Defined Economic Aggregates
   9. Quantifying the Strength of the Relationship Between Selected Economic Aggregates and Firm Performance
   10. Implementing Inflationary Adjustments
   11. Regional Economic Trends
   12. Quality and Timeliness of Regional Economic Data
   13. International Economic Analysis
   14. Globalization of Supply and Demand
   15. Summary
   16. References
5. CHAPTER 4: Industry Analysis
   1. Sources of Industry Data
   2. North American Industry Classification System
   3. Retaining an Industry Expert
   4. Conducting an Industry Analysis
   5. Relating Industry Growth to the Plaintiff’s Growth
   6. Other Industry Factors
   7. Yardstick Approach and Industry Analysis
   8. Summary
   9. References
6. CHAPTER 5: Projecting Lost Revenues
   1. Projections Versus Forecasts: Economic Versus Accounting Terminology
   2. Using Graphical Analysis as an Aid in the Forecasting Process
   3. Methods of Projecting Lost Revenues
   4. Curve‐Fitting Methods and Econometric Models
   5. Understanding Regression Output and Diagnostics
   6. Common Problems Affecting Regression Models
   7. Confidence in Forecasted Values
   8. Frequency of the Use of Econometric Techniques in Commercial Litigation
   9. Seasonality and the Forecasting Process
   10. Capacity Constraints and Forecasts
   11. Sensibility Check for the Forecasted Values
   12. Projecting Lost Sales for a New Business
   13. Projecting Losses for an Unestablished Business
   14. Summary
   15. Appendix
   16. References
7. CHAPTER 6: Cost Analysis and Profitability
   1. Presentation of Costs on the Company’s Financial Statements
   2. Measures of Costs
   3. Profit Margins and Profitability
   4. Appropriate Measure of Profitability for a Lost Profits Analysis
   5. Burden of Proof for Demonstrating Costs
   6. Fixed Versus Variable Costs
   7. Using Regression Analysis to Estimate Costs as Opposed to More Basic Methods
   8. Pitfalls of Using Regression Analysis to Measure Incremental Costs
   9. Possible Nonlinear Nature of Total Costs
   10. Limitations of Using Unadjusted Accounting Data for Measuring Incremental Costs
   11. Treatment of Overhead Costs
   12. Must a Plaintiff Be a Profitable Business to Recover Damages?
   13. Mitigation of Damages
   14. Cash Flows Versus Net Income: Effects on the Discounting Process
   15. Recasted Profits
   16. Firm‐Specific Financial Analysis
   17. Cross‐Sectional Versus Time Series Analysis
   18. Summary
   19. References
8. CHAPTER 7: Time Value of Money Considerations
   1. Determination of Interest Rates
   2. Types of Interest Rates
   3. Financial Markets: Money Market Versus Capital Market
   4. Money Market Securities and Interest Rates
   5. Capital Market
   6. Real Versus Nominal Interest Rates
   7. Determinants of Interest Rates
   8. Prejudgment Losses
   9. Components of the Cost of Capital
   10. Discounting Projected Future Profits
   11. Should the Risk‐Free Rate Be Normalized?
   12. Common Errors Made in Discounting by Damages “Experts”
   13. Summary
   14. References
9. CHAPTER 8: Business Valuations
   1. Legal Standard for Business Valuations in Business Interruption and Business Failure Lawsuits
   2. Lost Profits Versus Lost Business Value
   3. Business Valuation Framework
   4. Public Versus Private Companies
   5. Business Valuation Parameters
   6. Revenue Ruling 59–60 and Factors to Consider in Valuation
   7. Valuation Concepts
   8. Capitalization of Earnings
   9. Adjustments and Discounts
   10. Summary
   11. References
10. CHAPTER 9: Intellectual Property
    1. Patents
    2. Computation of Damages for Patent Infringement
    3. Legal Requirements Necessary to Prove Lost Profits
    4. Royalty Arrangements
    5. Copyrights
    6. Measurement of Damages for Copyright Infringement
    7. Trademarks
    8. Trade Secrets
    9. Summary
    10. References
11. CHAPTER 10: Securities‐Related Damages
    1. Key Securities Laws
    2. Damages in Securities Litigation
    3. Fraud‐on‐the‐Market
    4. Comparable Index Approach
    5. Event Study Approach
    6. Examining the Variation in Abnormal Returns
    7. Limitations of the Event Study Model
    8. Broker Raiding Cases
    9. Merger‐Related Damages
    10. History of Mergers in the United States
    11. Client‐Broker Claims
    12. Churning
    13. References
12. CHAPTER 11: Antitrust
    1. Antitrust Laws
    2. Antitrust Enforcement
    3. Economics of Monopoly
    4. Interpretation of Antitrust Violations: Structure Versus Conduct
    5. Changing Pattern of Antitrust Enforcement
    6. Antitrust and the New Economy
    7. Monopolization and Attempts at Monopolization
    8. Market Definition and Microeconomic Analysis
    9. Market Power
    10. Measures of Market Concentration
    11. Areeda and Turner’s Marginal Cost Rule of Predatory Pricing
    12. Summary
    13. References
13. CHAPTER 12: Economics of Punitive Damages
    1. Evolving Position of the U.S. Supreme Court on Punitive Damages
    2. Frequency of Punitive Damages
    3. Frequency of Punitive Damages and the Shadow Effect of Punitive Damages
    4. Purposes of Punitive Damages
    5. Compensatory Versus Punitive Damages
    6. Criminal Penalties and Punitive Damages in Civil Lawsuits
    7. Punishment of Corporations and Corporate Governance
    8. Spillover Effects and Punishment of Corporations
    9. Deterrence Theory and the Changing Litigation Environment
    10. Deterrence and Regulatory Processes
    11. Typical Financial Measures Used in the Determination of Punitive Damages
    12. Net Worth
    13. Market Capitalization
    14. Uncertain Litigation Environment
    15. Summary
    16. References
14. Index
15. End User License Agreement