Application of the Sales Projection Method in Measuring Trustee Breach of Fiduciary Duty Damages (Part I of II)

This is a two-part article focused on breach of fiduciary duties in the context of a trust and measuring damages.

The prudent investment of trust assets can minimize the potential for trustee fiduciary litigation risk, in addition to maximizing the trust beneficiaries’ economic interest in the trust. However, trust beneficiaries may initiate a breach of fiduciary duty tort claim when they feel that the trustee has breached any investment management fiduciary duties to the trust. For trust beneficiaries, and their legal counsel, who have brought breach of fiduciary duty tort claims against a trustee, one of the issues is how to measure the “damage” to the beneficiaries because of the breach. This discussion addresses the role of the investment management trustee as a fiduciary to the trust beneficiaries. This discussion then presents an analysis that legal counsel, in collaboration with a damages analyst, can use in attempting to quantify the “damage” to the trust beneficiary because of the investment management trustee breach of fiduciary duty.

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Want a Better Practice? Perform a File Autopsy!

We live and die in/by our engagements. Bet you never thought of it that way. But really, tell me life isn’t just peachy when you’re working on a fun/interesting/profitable case. And that life doesn’t just suck when you’re not. Wouldn’t it be nice to have more peaches? In this article, Rod Burkert shares his After Action Review process that enables practitioners to (re)focus on cases and clients that are interesting and engaging and discard those that are less “peachy”.

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Iterating the Weighted Average Cost of Capital

When an expert determines a discount rate for a controlling interest in a valuation using the Weighted Average Cost of Capital (WACC), that discount rate needs to be iterated. Since market values of debt and equity in a closely held company are not publicly traded and known, as Richard Claywell explains, the iteration process is necessary. It’s the only way to demonstrate the validity of using an industry average capital structure. Without iteration your discount rate—and proposed company value—may not stand up in court. Here’s why.

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ABOM Embezzlement: Fraudulent Billing/Cash Disbursement Schemes

This article will be discussing how an ABOM can mishandle outgoing cash disbursements to commit fraud. There are several fraudulent cash disbursement schemes that can take place within a firm or organization. These schemes fall under two main categories: billing schemes and check tampering schemes. It is possible for these schemes to go undetected for years if proper internal controls are not implemented.

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