VALUATION OF ECONOMIC DAMAGES - CASE STUDIES
Acropolis Advisory has extensive experience in the field of economic damage valuation, as well as financial advice in commercial disputes. We cooperate with reputable law firms. Our selected credentials are presented below:
Industry: Manufacturing of small household appliances
Subject: Valuation of damage suffered by a distributor as a result of manufacturer's withdrawal from the contract.
Description: Our client was a large manufacturing group producing, among others, small household appliances. We were asked to prepare a counter-opinion to the valuation of a claim presented by a former distributor. The main part of the claim concerned lost profits. The valuation was therefore multi-faceted and required construction of a hypothetical scenario of the claimant's financial projections. We rendered support in the form of valuation reports, as well as testimony of our consultants. With our help, the client's lawyers were capable to guide the process in a way that minimized the value of the settlement and secured client's interests.
Subject: Valuation of damage suffered by minority shareholders as a result of windup of the company by the majority shareholder.
Description: The minority shareholders of the company, who were also its co-founders and recalled members of the management board, asked us for financial support in a dispute with the majority shareholder. It concerned the resolution to wind-up the company despite the fact it was profitable and was growing rapidly. The claim concerned depletion of the shareholder value. The claimants’ case stressed that respective business activity was resumed by a newly established company of the majority shareholder. With our support the parties agreed on the value of exit-fee for transferring the rights to the discontinued business.
Industry: Food manufacturing
Subject: Valuation of shares in the process of squeeze-out of minority shareholders of a joint stock company.
Description: Lawyers representing shareholders subject to a compulsory squeeze-out, asked us to prepare an independent valuation of the minority shareholding. The claim raised by the minority shareholders concerned an unfair buyout price determined by an expert retained by the company under Art. 417 par. 1 of the Polish Companies Code. In the course of the work, we supported the clients in the development of arguments regarding substantial objections to the valuation prepared by the expert. We also prepared an alternative valuation of the minority stake as part of a private opinion presented to the court.
Subject: Value of damage to shareholders' value caused by abuse of power by the management board.
Description: A law firm representing the shareholders of a large fuel group asked us to assist in a lawsuit against a member of the management board. He was accused of actions to the detriment of the managed companies and significant depletion of shareholders' value. The valuation of the economic damage boiled down (in substance) to the quantification of the difference of the fair value of the individual companies of the group, between the hypothetical scenario (i.e. had the damage not occurred) and the actual scenario. Our involvement in the preparatory phase and during the court trial consisted of issuing a number of opinions on the value of the damage, as well as ongoing support to the lawyers in the area of corporate finance.
Subject: The value of the damage caused by the refusal to release the stored goods.
Description: A law firm representing a liquid fuel trading company asked us to prepare an opinion on the value of the damage suffered by its client. The entity was deprived of the ability to dispose of its commercial goods in the form of fuel stocks for a certain period of time. As a result, it suffered financial losses and lost tangible benefits. Our analysis, as well as the testimony of our consultant in the arbitration proceedings, concerned the quantification of the value of lost benefits and incurred losses, and presentation of basis for the assumptions made.
Industry: Manufacturing of means of transportation
Subject: Valuation of economic damage in the form of additional costs incurred in connection with the execution of the contract.
Description: A municipal company managing municipal public transportation, asked us to prepare a counter-opinion on the value of the damage in connection with a claim raised against them. The damage covered by the claim concerned additional costs incurred by a producer of rolling stock as a result of annexing the contract. Our work primarily consisted in verification of the formal and economic reasonableness of the qualification of the various categories of costs constituting the claim. We also verified the methodological correctness of the calculations made by the plaintiff's experts.
Subject: Valuation of shares in the process of buyout of minority shareholders.
Description: A shareholder of a metallurgical company subject to a compulsory buyout raised objections to the amount of the price received. He cited an unreliable expert valuation. In the course of our work, we prepared an independent valuation of the shares, as part of a private opinion presented to the court. In addition, we supported the law firm representing the plaintiff in the development of arguments regarding substantive objections to the expert's valuation.
Industry: Financial services
Subject: Valuation of the damages resulting from intellectual property infringement.
Description: A law firm representing a financial services provider commissioned us to conduct a valuation of the damage. The damage was caused by a competitor's use of a trademark confusingly similar to a trademark of the client. The claim concerned lost profits in the form of unrealized margin on sales. A key element of the project was to duly support the assumptions made regarding the volume of sales and profitability of the infringer's business in a situation of limited access to information.
Industry: Real estate development
Subject: Valuation of the economic damage related to a failed housing development project.
Description: We assisted a client infiling a claim against its business partner, related to the non-fulfillment of the terms of a contract. The business partner was accused of failing to promptly deliver formal and factual actions to prepare the land for the investment (in particular - to obtain a valid zoning decision). The valuation of the damage was a multi-faceted process and included not only the costs and losses incurred by the client, but also the benefits lost as a result of the failure to implement the project and build a residential complex.
Subject: Report on the verification of the economic viability of an investment made by a municipal company.
Description: We were commissioned by the management of a municipal company providing water services to verify the economic profitability of the investment in the form of the purchase of a municipal sewage network. The background was an investigation by law enforcement authorities into alleged abuse of power and failure to fulfil the duties by the company's management. Our analysis consisted in evaluation of the financial and economic aspect of the investment, taking into account the specifics of the legal environment of public utilities.