Uncharted territory – Recovering lost profits for a new or unestablished business
Abstract: Proving lost profits for a new or unestablished business with no earnings track record is a challenge. Regardless of whether a damaged business is established or unestablished, proving lost profits requires experts to predict the plaintiff’s future performance. This article looks at strategies experts use to estimate lost profits when historical performance isn’t an option, including considering management quality, industry and market statistics and benchmarks, and the performance of comparable companies. A sidebar discusses whether experts can rely on management projections.