Financial Dispute in a Neurology Practice Partnership

This case study explores a financial dispute between two neurologists, where the recruited neurologist was forced to establish a solo practice after their partnership ended.

ByExpert Institute

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Published on February 6, 2024

Three people settle legal dispute at desk

Case Overview

This case study delves into a financial dispute between two neurologists operating in an area like Anchorage, AK. An established neurologist recruited another practitioner to join their practice.

However, the partnership deteriorated after about a year when the newly hired neurologist raised concerns about certain standard of care issues within the practice.

This led the established neurologists to activate a clause in their professional agreement, effectively terminating their business relationship. The fallout from this termination left the second neurologists unable to see patients for an extended period.

This resulted in lost shares in an established practice. Consequently, the recruited physician was forced to start a solo practice from scratch. The central issue of this case is determining the economic damages suffered by the second neurologist due to this abrupt termination. An expert in medical practice valuation was sought.

Questions to the expert and their responses

Q1

Can you briefly describe your experience in economics and valuation as it relates to hypothetical modeling of projected medical revenue?

I have been associated with Phillips Fractor & Company since 2000. My work focuses on commercial business cases involving business valuations and modeling projected revenues.

I’ve worked on numerous cases where I estimated lost profits resulting from various legal issues such as breach of contract and theft of trade secrets.

Q2

What additional information would you require to determine projected revenue, lost earnings, and opportunity cost for the second neurologist who was forced out of the practice?

To accurately estimate projected revenue, lost earnings, and opportunity cost for the second neurologists, I would require several pieces of information. These include copies of any agreements between the two doctors, financial statements for both doctors during their partnership and individually before and after their collaboration ended, and details about pre and post split earnings for both doctors.

Q3

Have you ever reviewed a similar case? If yes, please elaborate.

Yes, I have reviewed similar cases before.

For instance, I analyzed lost earnings for dental practices and a surgeon who suffered losses due to fraudulent inducement and defamation situations. Additionally, I provided a rebuttal analysis of a business valuation and lost profits claim for a multi-office dental practice.

About the expert

This expert has an extensive background in business valuation, with a BS in Accounting and accreditation in business valuation. They have held high-ranking positions such as Chief Financial Officer and Corporate Accounting Manager at various companies, demonstrating their proficiency in financial management. Currently serving as the Director of Forensic Accounting at a California-based consultancy, they bring a wealth of knowledge and experience to this case involving economic damages in a medical practice dispute.

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