Baker Tilly was retained by counsel for a manufacturing company related to a $57 million claim for lost profits arising from the alleged “double sale” of a by-product of the company’s manufacturing process. The plaintiff in the matter, a metals broker, alleged that it had obtained the rights to purchase the by-product, and that it had intended to process the material to recover scrap metal, which it then intended to resell.
In analyzing the plaintiff’s claim, we conducted detailed analyses of the plaintiff’s historical business operations over an approximate 10-year period. Based upon these analyses, we demonstrated that the plaintiff’s lost profits claim was based upon a business model that did not comport with the plaintiff’s historical business practices. Furthermore, our critique of the plaintiff’s damage model highlighted various mathematical errors, and demonstrated inconsistencies and assumption errors that grossly overstated the plaintiff’s claim.
Based upon our analyses and critique, the plaintiff revised its damage model several times, reducing the claim by tens of millions of dollars. Ultimately, our analysis and expert report assisted counsel in negotiating a settlement favorable to our client.
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