Case Studies The following case studies are representative of the work that we engage in on behalf of client law firms: Age Discrimination in Termination The Case: Age Discrimination in Termination A former employee sued a high-tech company for age discrimination following a company-wide reduction in force. Our Approach Researched the steps that the company undertook in formulating RIF policy, including severance Analyzed the resume and job search strategies employed by the individual Initiated a review of business opportunities started by the employee Prepared a detailed report for the company attorney The Outcome The case was settled. Our report was instrumental in preventing the case from going to trial. Breach of Employment and Defamation The Case: Breach of Employment and Defamation The president/CEO of a North American subsidiary of a European-based conglomerate was terminated for cause. Our Approach Reviewed the job search efforts of a former employee and opined relative to employability, earnings potential, and mitigation of damages. Reviewed the impact of “for cause” termination in the marketplace for a former executive and testified regarding the negative impact of the alleged defamatory statements on the business community. The Outcome The jury found in favor of the plaintiff, awarding $13 million in compensatory and punitive damages, which at the time was believed to be the largest award of this type of case in U.S. history. The trial court’s judgment was subsequently affirmed by the Illinois Appellate Court. Commercial Law – (including Shareholder Disputes) The Case – Commercial Law Including Shareholder Dispute Historically, family shareholders were all paid the same salary and bonus regardless of position held or performance. When a shareholder died – shares and management duties were distributed to remaining shareholders. Eventually there were only two family members who held shares and only one was active in the Company serving as President. The other who was not active in the Company was paid a significantly reduced “salary”, and the individual active in the Company was paid essentially all the income in the Subchapter S corporation between salary and bonus. The inactive shareholder sued the active shareholder and the Company claiming that the compensation was excessive, and the excessive compensation should have been paid out as dividends, of which the inactive individual would have shared equally. Our Approach We identified the duties and responsibilities of the management team focusing on the President’s position and identified the impact of the breadth and depth of the President’s management of the Company. A competitive analysis of the President’s compensation (salary and performance bonus) was conducted for the various time periods. The analysis included market pricing by comparing the President’s compensation to what would have been required for an equivalent management team (CEO and other executives). We analyzed reports developed by Plaintiff’s expert witness and identified assumptions resulting in a difference of opinion, including their financial impact. The Outcome The case went to arbitration and the Judge essentially ruled in favor of the Defendant and facilitated a buy-out of the Plaintiff at favorable terms. Employability and Earnings Potential The Case: Employability and Earnings Potential In a divorce case, our client required an analysis of a highly paid practicing surgeon changing careers and attending law school. Our Approach Reviewed and analyzed the available empirical data regarding the fields of employment and earnings potential for individuals with MD/JD degrees. Conducted telephone interviews of medical malpractice and/or personal injury plaintiff attorneys, as well as prominent MD/JDs who have made the transition to full-time legal professionals in the relevant geographical area, to determine potential employability and earnings potential. The Outcome The case settled after a short trial, with the content and opinion of our report provided as a basis for projected employability and earnings potential. Family Law (Including Matrimonial) – Employability and Earnings Potential The Case: Employability and Earnings Potential in a Divorce/Alimony Case In a family law case, our client required an assessment of earnings potential and employability of a 64-year-old, well compensated former financial services executive. Our Approach Our experts interviewed the financial services executive, analyzed transferable skills, conducted a market analysis of jobs in both the executive’s primary professional area, as well as roles where the skills might have been transferable. Our analysis considered the executive’s education and work experience as well as additional special skills in professional sports. We examined the implication of the executive’s age and remaining career “runway,” as well as validated the earnings potential with multiple highly regarded compensation databases. The Outcome The case settled before going to trial with the FECC analysis providing a substantive positive impact for our client. Equitable Distribution of Executive Compensation in a Divorce Proceeding The Case: Equitable Distribution of Executive Compensation Our Approach Initiated a thorough review of all compensation components submitted by one spouse and identified potential and reasonable additional long-term components for that spouse Performed various analyses on all compensation components Provided all relevant compensation information to an economist for valuation Determined reasonable employment and compensation prospects for the other spouse Provided examples of actual appropriate employment opportunities The Outcome The case was settled before the trial. Our findings were accepted in the settlement. Excess Executive Compensation The Case: Excess Executive Compensation In a derivative shareholder suit, our client claimed that senior executives of a corporation received excessive compensation and therefore there were no profits left to distribute to the shareholders. Our Approach Analyzed all executive salary and bonus history, employee benefits, and executive perquisites in accordance with the factors which the IRS considers when evaluating excessive compensation Constructed and provided analysis on various compensation models Developed short and long-term compensation models Deposed by opposing attorneys, assisted in developing the rebuttal to the opposition’s expert witness The Outcome The case was settled immediately after the trial began based on the attorney’s opening statement that referenced the opinion and content of our report. The corporation bought out the minority shareholder at a significant premium. Personal Injury and Wrongful Death (including Medical Malpractice) The Case – Wrongful Death An automobile accident resulted in death of an individual who held a management position in an Electrical Company. The surviving wife sued the operator of the vehicle involved in the accident and the Company which owned it. On behalf of the surviving spouse and estate, we developed estimates of lost income, loss in savings, loss in support and loss in services (over the deceased’s expected lifetime) based upon various career assumptions. This included compensation of future employment as supported by typical compensation and promotional patterns, and information provided by corporate peers. The Outcome The case settled during trial on terms favorable to our clients. Severance Payment The Case: Severance Payment Following the acquisition of one savings bank by another, the purchasing bank terminated over 20 senior executives at the acquired bank as part of the integration of the two banks. The acquired bank had Change in Control provisions which provide significant severance payments to the executives terminated as a result of the Change in Control. The acquiring bank challenged the propriety the Change in Control provisions in terms of market practice, questioned the interpretation of the Change in Control provisions as proposed by the terminated executives in terms of individual payments, and refused to make any payments to the terminated executives. The issue went to arbitration. Our Approach We reviewed the change in control provisions in terms of typical industry practice and determined that they were reasonable. We developed a recommended interpretation of the rather vague Change in Control provisions. We developed a model that identified what was owed to each executive based upon the recommended interpretation. We presented an expert report to the arbitrators of the case. The Outcome The testimony was accepted. There was a successful decision in favor of the terminated executives. Unreasonable Compensation The Case: Unreasonable Compensation IRS vs. electronics/computer distributor. The IRS questioned the compensation of the president/owner of the company for three previous years. Our Approach The 12 critical factors identified by the IRS were addressed when the duties and responsibilities of the owner were analyzed. The owner’s position was market-priced and a methodology developed determined that the compensation was reasonable. Various databases were analyzed, assuring a reliable and valid sample. We presented an expert report to attorneys and testified during the trial. The Outcome The testimony was accepted. There was a successful decision in favor of the business owner.