Company Fails Due to Defective Product

    Business Valuation Expert WitnessThis case takes place in Pennsylvania and involves the forensic valuation of a start-up company. The plaintiffs are the owners of a start-up company that had designed a range of fantasy themed entertainment products, which were intended for use by young teenagers of both genders. The defendants are a contract manufacturing company that was selected by the defendant to produce equipment used in the games. The defendants delivered the equipment that the plaintiffs requested, however it was discovered that a large amount of  the equipment that was provided was flawed and tended to malfunction. Despite these flaws, equipment delivery continued throughout the launch of the company. It is alleged that due to the equipment being faulty, the company did not have a successful launch and collapsed as a result. An equipment appraisal expert witness was needed for the case.

    Question(s) For Expert Witness

    • 1. Do you have extensive experience performing valuation studies of start-up / early stage companies?
    • 2. What is your experience working on similar cases?
    • 3. Are you available to value this company at the time preceding the aforementioned breach of contract?

    Expert Witness Response E-008054

    I have extensive experience with the valuation of start-up companies. I am currently engaged in a matter right now involving the valuation of a start-up in the bottled water industry, which was unable to get off the ground due to environmental issues. Beyond that, I am one of the authors of the forthcoming American Institute of Certified Public Accountants (“AICPA”) publication on attaining reasonable certainty in economic damage calculations. One of the chapters that we deal with in the practice aid is damages associated with new and start-up businesses. I can value the company at the time just before the breach. I am a CPA, Accredited in Business Valuation by the AICPA, Certified in Financial Forensics by the AICPA, and I am a Certified Fraud Examiner (CFE). For the last 23 years I have been working with attorneys and their clients in dispute matters involving damage analyses, business valuation and forensic accounting issues. Over that time period, I have testified at deposition, trial and alternative dispute venues more than 50 times, and have been qualified as an expert in economic damages, business valuation and forensic accounting.

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