Impact of growth rate on lost profits

Description

Abstract: When calculating lost profits, damages experts need to determine the growth rate carefully. Failure to properly analyze the factors that drive a company’s expected revenue growth may jeopardize the admissibility of an expert’s testimony in a Daubert challenge. This article uses several recent court cases to illustrate the importance of supporting the growth rate with reasonable assumptions and detailed analysis based on objective market evidence. Celebrity Cruises Inc. v. Essef Corp., 434 F. Supp.2d 169 (S.D.N.Y. 2006) Chemipal Ltd. v. Slim-Fast Nutritional Foods Int’l Inc., 350 F. Supp. 2d 582 (D. Del. 2004) Manpower Inc. v. Insurance Company of the State of Pennsylvania, 732 F.3d 796, 799 (7th Cir., 2013)