Why Valuation Experts Get Excluded, and How to Avoid It
This session will address common factors that can lead to testimony from damages and valuation experts being excluded, along with recent trends and notable court opinions. The panelists will start by covering the legal standards for the admission of expert testimony, including substantive expertise, relevance, reliability and adequate foundation. Next, we will describe common technical mistakes that have led to exclusion or other problems, such as applying a premise or standard of value not appropriate to the situation at hand (e.g., liquidation value when going-concern value is more appropriate, synergistic value when fair value is the legally required standard, current value when solvency must be evaluated as of a specific prior date), double-counting damages for lost profits and lost business value over the same period of time, offering a valuation based on information that would not have been known or knowable as of the effective date of the valuation, failing to track documents reviewed in accordance with applicable rules, and reliance on privileged materials not available to the opposing party. After covering legal and technical issues, the panelists will use case studies and panel discussion to summarize current trends in the admission or exclusion of expert testimony, including recent opinions in which a federal or state court excluded a financial expert or limited the scope of his or her testimony. Finally, alternative approaches will be presented that might have allowed the experts from our case studies to have offered testimony similar to what was excluded.Learning Objectives:Attendees will analyze the legal standards governing the admissibility of valuation and damages expert testimony, including relevance, reliability, and methodological rigor.Attendees will evaluate common pitfalls that lead to exclusion of expert testimony, including improper assumptions, double-counting of damages, reliance on hindsight, and use of privileged or inadmissible information.Attendees will assess best practices for strengthening expert valuation reports, including documentation, support for assumptions, and alignment with accepted valuation methodologies.