Case Study: Economic Damages

 

Written by: Matt Gross, CPA

When it comes to Economic Damages, a significant challenge is securing a technically skilled forensic accounting firm who is able to communicate information in an easily understandable way to a trier of fact. Economic Damages in a breach of contract or trade secrets case are rooted in the lost profits of a business.

Challenges

  • Highly specialized industry.

  • Domestic and Foreign Operations.

  • No segmentation of accounting records.

Assignment

  • Hired by Plaintiff’s counsel for the assessment of Economic Damages due to breach of contract, misappropriation of trade secrets, and tortious interference with economic relations.

  • Expert and Rebuttal Reports under FRCP 26.

  • Presentation to a trier of fact in the United States District Court, Portland Division.


Analysis and Testimony

Over a two-year period, Cogence Group analyzed the Economic Damages incurred on a major line of business for the Plaintiff. Damages were comprised of lost sales and the erosion of Plaintiff’s market prices. Cogence Group appropriately applied a sound but-for methodology to calculate the damages Plaintiff sustained. For trial, Cogence Group’s extensive preparation included creating clear summary demonstratives, drafting direct examination questions for Jay Sickler, and cross-examination questions for the opposing expert.

Outcome

The two-week trial went to the jury to determine liability, and if the Defendant(s) were liable, the amount of damages to award. The jury found in favor of the Plaintiff. When it came to Economic Damages, the jury determined the Plaintiff had suffered damages in excess of three million dollars.

What our Client Had to Say

“Jay and his colleagues did a tremendous job working through our complex multi-national financials, involving our entities in the US, Brazil, China, and Vietnam. They had to tediously and meticulously carve out specific segments of our business, related to the economic damages we incurred, for a federal court case that was three years in the making. Jay took the time to truly understand our operations, how we priced things, and how our competition eroded our market share and revenues over time. This careful analysis and his personal testimony about it, while effectively rebutting opposing counsel’s expert, was key to our unanimous jury verdict. I highly recommend Jay and Cogence.”

 Ed McGrath, Marine Lumber

September, 2024

 
Forensics, Case StudiesMatt Gross