Retail Company Allegedly Attempts To Rid Location Of Competition

ByJohn Lomicky

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Updated onApril 11, 2019

This case involves two retail corporations that entered into a signed letter of intent whereby Company A would take over 15 locations of Company B. The purchase price would have been $10 million. Company B was leasing one location from a third party leasing agent and Company A had a location about 1 mile away. Company A began negotiating with the leasing agent to start a new lease at the same location where Company B was located and paid the agent a $300,000 consulting fee. The leasing agent informed Company B that in order for the deal with Company A to go through, they would need to execute a lease termination which they did. Company A executed a new lease at the same location and never pursued the deal with Company B. It is alleged that Company A misrepresented their intention for the purpose of ridding the area of competition. An expert in forensic economics was sought to opine on the reasonable amount of revenue this store could have generated and calculate damages.

Question(s) For Expert Witness

1. Please describe your experience in forensic economics, specifically in calculating revenue and damages for retail stores.

2. What factors are taken into consideration when calculating damages for such a retailer?

Expert Witness Response E-279159

inline imageI am an antitrust economist and a part-time lecturer at the economics department of a large research university. Last year, I worked on a related project where I calculated estimated revenues for a large chain retailer as well as for liquor stores. I testified to my calculations in at trial. Moreover, I have calculated business interruption damages (lost revenues and profits) for numerous projects that are very similar in nature. In essence, based on the case summary, one would need to estimate lost revenues and profits Company B would have achieved but for the alleged misconduct. The primary sources of analysis will be the historical sales of Company B location along with market shares and the number of other competitors in the market. A before and after analysis would be conducted, taking into account the predicted market outlook in the relevant region so that lost profits can be calculated into the future (and present value can be calculated). There may be other spillover damages stemming from the fact that Company B lost one location, hence the relative brand image of Company B is damaged. This is a rough outline of how to approach the problem, but case-specific facts and evidence, as well as the nature of available data, will dictate the most accurate approach.

About the author

John Lomicky

John Lomicky

John Lomicky is a J.D. candidate at FSU Law with a multidisciplinary background. He earned his Bachelor's degree in Neurobiology and Near Eastern Studies from Georgetown University and has graduate degrees in International Business and Eurasian Studies. John's professional experience includes working in private equity as an Associate at Kingfish Group and in legal business development and research roles at the Expert Institute. His expertise spans managing sales teams, company expansion, and providing consultative services to legal practices in various fields.

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