Expert Witnesses Establish the Real Worth of Companies

>> Wednesday, March 7, 2018

Whenever complex financial litigation arises, companies have to start preparing their case. One of the most difficult questions is proving the worth of a company. Perhaps you are in a dispute with an old partner or an employee who has a share of the company. In some instances, there may be questions about the actual value of those shares. Expert witnesses provide a smart lawyer with a resource to prove to the jury just what a company is worth. It is not enough for a company to simply guess at its valuation. Good experts ensure that there's a lack of uncertainty.

One of the complicating factors in these cases is how to deal with the accounts receivable a financial institution may have out there. If someone is challenging to own a piece of that bank, then the bank will need to prove how much it's worth. This means figuring out the likelihood that people will pay back the loans owed to that bank. Just because a bank has lent out money does not mean that people will necessarily pay it back. A substandard loan is one that's on the books technically but does not stand a great chance of being paid back. If banks have too many of these, then their value will take a hit. This can either be a good thing or a bad thing depending on why the bank needs to establish its value.

Expert witnesses can help to show that a certain type of debt is substandard. There are elements of the debtor's risk profile that show the low likelihood of repayment. An expert can come in and show that because a person has just lost his job and fallen behind twice on the loan, it means he is unlikely to pay back the debt in a timely manner. The best legal teams know that expert witnesses play well with the jury because juries are trained to think that anyone with the word "expert" in their title is an authority. The best experts combine the title with an innate ability to build trust.


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