Experts Opine on Company’s Ability to Predict Bankruptcy

    Bankruptcy Expert WitnessA group of investors in Illinois filed a class action suit against a leather manufacturing company for failing to foresee its own bankruptcy. The investors perceived company management to be misleading them, sending out ambiguous statements and and omitting material information about the leather company’s lack of compliance with environmental regulations and worsening financial condition. The company was previously noted as violating multiple water safety and hazardous waste mandates, causing the state regulatory board to close down their production in early 2015. The company’s profits were decimated and its stocks plummeted, causing it to file for bankruptcy. The investors requested an expert witness who could opine on whether or not bankruptcy was a foreseeable outcome given the status of the company’s financials and the various environmental claims levied against them.

    Question(s) For Expert Witness

    • 1. Have you dealt with environmental regulations in your career, and can you opine on the risk they present to a company like the one in this case?
    • 2. Are you willing to review the company’s financial records and environmental transgressions to determine whether or not bankruptcy was a foreseeable outcome?

    Expert Witness Response

    In my career in environmental insurance underwriting, I have had a great deal of experience evaluating whether or not potential client companies could meet financial qualifications. I have absolutely seen the effect environmental compliance can have on companies, and am therefore highly familiar with environmental regulation and remediation. Given my experience assessing various company’s financial records, I believe I could offer a cogent review of the company’s financial standing and environmental transgressions to determine if they were a signal of a looming bankruptcy.

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