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January, 2012 Contents
Business Valuation Basics & Beyond at SC&H Would you like to learn more about business valuation? Please contact Nathan DiNatale. 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 30 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 17 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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The Cost Approach: A Viable Method for Determining the Value of a Small Business in Divorce By Nathan E. DiNatale, CPA/ABV, CVA Valuing a small family-owned business can be much more difficult than valuing a large, well established business, especially in the context of divorce, due to concerns about the quality and availability of the required information. Divorce is often the first line of business in which valuators position themselves because of ease of entry, existing attorney relationships, and availability of work. However, the valuations associated with divorce litigation are often misconstrued as low hanging fruit. In reality, these valuations are littered with unique issues that are often overlooked when the income or market approach to value the business is used. Accordingly, the valuation analyst should, at a minimum, consider the cost approach as a sanity check in reaching a conclusion as to the overall value of the business. Click here for the full article featured in Business Valuation Update. How Synergies & Other 'Non-Stock' Benefits May Impact M&A Values Two courts approach synergies from opposite sides of the financial spectrum—the Delaware Chancery Court after a successful asset sale and a federal district court after an acquisition ended in bankruptcy. Both decisions ask essentially the same question: did the company experts adequately factor the value of synergies in their appraisals?
Click here for the full article Fairness Opinion Flawed for Lack of DCF of Hard-to-Value Company? In re Answers Corp. Shareholders Litigation, 2011 WL 1366780 (Del. Ch.) All the experts agreed: the Internet company at the heart of this fair process/fair price review was "extremely difficult" to value. For example, it was highly dependent on Google, which accounted for 75% of its revenues in 2010. Moreover, the Google and other search algorithms that direct traffic to the company's site were so unpredictable, it was unable to make long-range financial projections. Click here for the full article Proving Loss Causation Requires Early and Precise Expert Evidence Loss causation continues to be the linchpin in proving securities fraud claims, whether the litigation concerns a company's alleged misstatements of hard-to-value subprime assets or simply its loss of value due to the economic downturn. As these two cases illustrate, plaintiffs should consider enlisting financial experts to advise on loss caution elements at the pleadings stage and strengthen their cases against dismissal. Click here for the full article Vital for Expert to Know Date of Stolen Trade Secrets In re Chemtura Corp, 2011 WL 1496327 (Bkrtcy. S.D.N.Y) After the court determined in pre-trial proceedings that the defendant misappropriated 12 detailed business models belonging to the plaintiff, the defendant challenged the plaintiff's damages expert under Daubert. Specifically, the defendant claimed the expert had used an arbitrary and incorrect date for calculating reasonable royalties.
Click here for the full article
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