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April, 2011
Contents
Business Valuation Basics & Beyond at SC&H Would you like to learn more about business valuation? Contact Nathan DiNatale to have a 45 minute presentation at your office. He will guide you through the terminology, methods and approaches to valuing a privately held business.
SC&H Business Valuation & Litigation Support Leaders 
Michael J. Young, Over 27 years of experience; serves as expert witness in litigation issues including economic damages, patent infringement, valuation, and fraud matters in Federal and state courts. 
Nathan E. DiNatale, Over 16 years of experience; focuses on business valuations, valuations for financial reporting, litigation support and economic damage calculations. Serves as expert witness in valuation and litigation cases.
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Beyond the 25% Rule: Impact of Fed Circuit's Decision on IP Valuation Uniloc USA, Inc. v. Microsoft Corp., 2011 WL 9738 (C.A.Fed. (R.I.)) In this landmark opinion, the U.S. Court of Appeals for the Federal Circuit abolished the "25% rule of thumb" in patent litigation. Despite its prior wide use by experts—and passive acceptance among courts—the 25% rule was inadmissible under Daubert, the court held, "because it fails to tie a reasonable royalty base to the facts of the case" and "is a fundamentally flawed tool." Specifically, the rule does not speak to a particular hypothetical negotiation or reasonable royalty involving any particular technology, industry, or party. Relying on the rule "is far more unreliable and irrelevant," the court said, than relying on the parties' prior licenses that involve at least some "minimal connection" to the patents at issue. Click here for the full article Subprime Fraud Focuses on Fair Value for Financial Reporting Standard In re Citigroup, Inc. Securities Litigation, 2010 WL 4484650 (S.D.N.Y.) In this much-anticipated, closely watched securities class action, shareholders claimed that Citigroup Inc., along with a number of key officers and directors, consistently misrepresented the risks related to its collateralized debt obligations (CDOs), auction rate securities (ARS), and similar subprime investments. The defendants moved to dismiss the claims, contending the allegations fell short of the heightened requirements for pleading securities fraud. Click here for the full article Divorce Courts Reject 'Calculation Values' Offered by BV Experts During these tough economic times, parties and their attorneys may often request a business appraiser to perform a preliminary "calculation valuation" for settlement purposes. Although the majority of cases do settle, these two recent cases highlight problems of presenting anything less than a complete valuation in court. Click here for the full article Lost Profits Roundup: Better Industry Research & Expertise Proves Essential Five new cases demonstrate that the more comprehensive and careful the analysis, the more an expert's calculations will lend certainty to a finding of lost profits damages. Click here for the full article Current Market Conditions Testing the Limits of Bankruptcy Courts and Law In the wake of the recent economic crisis, bankruptcy courts have taken on large, complex cases, made even more complicated by continuing uncertainty in the credit and liquidity markets. Adding to the pressure, expedited settlements are creating unique valuation issues that are, as one court put it, "testing the limits of bankruptcy law." Click here for the full article
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