BVR Logo March 13, 2019 | Issue #198-2

BVWire is your go-to source for the latest in the business valuation profession. Highlights for this week include: 


Economic damages culminate suit over war journalist's extrajudicial killing

A civil suit arising out of the “deliberated” killing of a well-respected American war correspondent illustrates that valuation and damages issues play a critical role in most litigation. The loss of income analysis in this case will be of particular interest to appraisers specializing in personal injury cases.

Marie Colvin was an acclaimed American war journalist who worked for over 25 years for the British paper, The Sunday Times. In February 2012, Colvin, who was a special target of the Syrian government, was killed in a concerted artillery attack in the Syrian city of Homs. Afterwards, members of the Syrian military and intelligence celebrated. Based on evidence, they said: “Marie Colvin was a dog and now she’s dead. Let the Americans help her now.”

Colvin’s youngest sister, Cathleen, and Colvin’s niece and nephew sued the Syrian government under the Foreign Sovereign Immunities Act (FSIA), alleging the reporter’s death was an extrajudicial killing. The plaintiffs sought damages under two legal theories: wrongful death and emotional distress. The court found there was copious evidence (almost 1,000 pages of exhibits, detailed affidavits, declarations, and expert reports) to support a finding that Colvin was the victim of a “deliberated killing” by the Syrian government.

Under the wrongful death theory, all plaintiffs were entitled to monetary damages for the loss of prospective income, benefits, and retirement pay as shown by a reasonable estimate from an expert that was based on well-founded assumptions. The plaintiffs’ damages expert was highly qualified, the court noted. She held a Ph.D. in economics and had worked in valuation for over 10 years, participating in “hundreds of valuation-related projects around the world.” The testimony met the requirements of federal rule of evidence 702, the court found.

To calculate the economic loss resulting from the reporter’s premature death, the expert decided to take a conservative view. In determining the expected income, the expert did not include professional earnings beyond Colvin’s employment with The Sunday Times, believing “it was not possible” to quantify with “a reasonable degree of certainty” any future book deals or film contracts that Marie Colvin could have received.

The expert also adjusted the total amount of lost wages for the risk inherent in the journalist’s job (“probability of survival”) and the time value of money and found the economic loss was $2.37 million. The court credited the expert’s opinion but said that, under the relevant case law, the calculation had to be adjusted for consumption costs. Therefore, the court asked for an updated expert report before making a final determination as to the exact amount of loss of income.

The court also awarded Colvin’s sister $2.5 million to compensate for the pain and suffering resulting from the journalist’s death, and it awarded punitive damages of $300 million. However, this is a default judgment against the Syrian government. How much of the award the plaintiffs will ever see remains unclear.

A digest of Colvin v. Syrian Arab Republic, 2019 U.S. Dist. LEXIS 14641 (Jan. 30, 2019), and the court’s opinion will be available soon at BVLaw.

Extra: A well-received movie based on Marie Colvin’s life came out in 2018. It’s called A Private War.


The best way to lure BV business is face-to-face, survey finds

The one-on-one meeting with a prospective client is the most effective method to bring in valuation business, according to a recent survey. Three of the five marketing techniques most cited all involve face-to-face interaction with prospects or referral sources. Those techniques are: one-on-one meetings with prospective clients (cited by 58% of survey respondents), public speaking (44%), and joining business organizations such as associations, committees, and boards (37%). Rounding out the top five are: cross-marketing to existing clients (40%) and updating the marketing website (36%). The survey and analysis is in the BVR Firm Economics & Best Practices Guide, 2019-2020 edition, which is based on responses from over 160 business valuation, forensic, and litigation support (BVFLS) firms collected during September 2018 and October 2018. The guide presents a thorough analysis of best practices in financial management, marketing, human resources, compensation, and professional and ownership standards. Data on over 330 BVFLS firm owners/partners and over 1,200 professional staff are included in the management and compensation sections.

Senior healthcare M&A soars

Rising interest rates have not affected the market for seniors housing and care assets and demand remains extremely high across all quality and property types, according to new acquisition data from Irving Levin Associates (Norwalk, Conn.). The number of publicly announced seniors housing and care acquisitions in the fourth quarter of 2018 topped 100 transactions for the third quarter in a row, with 103 total transactions announced. The fourth-quarter acquisition volume helped propel 2018 into the record books with 426 publicly announced acquisitions in the seniors housing and care sectors. The activity continues to be almost evenly split between skilled nursing and seniors housing. Levin offers a free white paper, Seniors Housing & Health Care M&A in the 21st Century.”

BV specialty available to ASA real property valuers

Real property appraisers designated by the American Society of Appraisers can add a specialty in going-concern valuation for valuing a real estate-centered enterprise, i.e., a firm that also owns its real estate, such as a restaurant, nursing home, hotel, convenience store, and the like. Appraisers must successfully complete two classes (RP400 and RP401), submit a report for peer review, and apply for the specialty designation enhancement. The ASA’s NorCal Chapter in Lafayette, Calif., will offer these courses for three days with a two-hour exam at the start of fourth day. The courses are: RP 401—Allocating Components in Going Concern Appraisals (May 20-23) and RP 400—Real Property Going Concern Appraisals—Case Studies (June 3-6). L. Deane Wilson, the managing partner for The Blackwell Group (Grass Valley, Calif.), a noted expert in going-concern valuations, will present both courses.


Upgrade to the Cost of Capital Professional highlights free webinar

A number of new enhancements to BVR’s Cost of Capital Professional platform were explained during a recent free webinar on March 6. Beta-adjusted size premia have been added in addition to the existing S&P-based size premia. Also, some practitioners use geometric mean returns and others use arithmetic mean returns, and you now have the ability to choose the one you prefer. The platform’s original version allowed you to estimate a cost of equity, but you can now enter inputs that will allow you to compute the weighted average cost of capital (WACC). Another enhancement is the ability to download to Excel user-selected variables and calculations, including citations of all sources used. You can also download your results and analysis into Word. In February, year-end 2018 equity risk premia and size premia were made available, the presenters noted during the webinar. To access a recording of the free webinar (which will be available soon), go to the Cost of Capital Professional webpage and click on “Free Webinar & Demo.”

How to support subjective areas of valuation

Gone are the days when you could support your opinion by simply saying, “It is based on my professional judgment.” If you’re in court, the triers of fact are very sophisticated these days, and you must be ready to fully support your opinion, even in difficult areas that require subjective judgment. Also, there are a lot more Daubert challenges to valuation experts today, so you need to be prepared for that, which is almost inevitable.

Show your work: Whether it’s normalization adjustments, discount rates, market multiples, or the like, one way to support your opinion is to show exactly what you did and why. Present a road map, show all of the steps you took, and explain your reasoning in detail for each step. Show any data and analysis you did. Don’t use jargon, but, if you have to use technical terms, define and explain them. It is often very difficult to explain what may seem to be unexplainable, but this technique will help.

When valuing startups, there will be more areas of subjective judgment than with a mature firm, so attend the session, “Professional Judgment and Start-Ups: On Your Mark, Get Set, and Go,” which attorney David Griffin (Rutkin Oldham Griffin) and valuation expert Ron Seigneur (Seigneur Gustafson LLP) will conduct at the National Divorce Conference in Las Vegas May 8-10. Presented by BVR and the American Academy of Matrimonial Lawyers (AAML), the conference will bring together the leading matrimonial attorneys and financial and valuation experts. Don’t miss it!

EBA issues valuation handbook for bank resolutions

The European Banking Authority (EBA) has published the “Handbook on Valuation for Purposes of Resolution,” which is addressed to national and EU resolution authorities. A bank resolution occurs when authorities determine that a failing bank cannot go through normal insolvency proceedings without harming the public interest and causing financial instability.

The focus of the 97-page handbook is on convergence and consistency of valuation practices as well as the interaction with independent valuers across the EU. The handbook has been developed in consultation with the International Valuation Standards Council (IVSC).

BV movers . . .

People: In the Transaction Advisory and Litigation Support Services practice at Creve Coeur, Mo.-based Brown Smith Wallace, Jason R. Buhlinger, CFE, CVA, has been promoted to principal and Marggie Schulte, CPA, CFE, CVA, has been promoted to manager … Jennifer Schwalm has been admitted as a partner in the healthcare practice at Chicago-based Baker Tilly and will serve as the firm’s senior services sector leader; she has more than 25 years of experience in healthcare and senior services.

Firms: Atlanta-based Frazier & Deeter has opened an office in London, its first international location; the new office will offer business advisory services, including international tax, tax compliance, transaction advisory, and other services … Winchester, Va.-based Yount Hyde & Barbour (YHB) has merged with Murray Jonson White & Associates (MJW) of Falls Church, Va.; MJW’s professional staff of 20 will join YHB and will remain in their Falls Church location … Whalen & Co. of Worthington, Ohio, has acquired another Ohio firm, Martinelli & Co. of Bexley … RoseRyan of Newark, Calif. has launched a new company, Kukuza Associates LLC, that will concentrate solely on the cannabis market … San Ramon, Calif.-based Armanino LLP has added a new full-service office with tax, audit, and consulting resources located in downtown Seattle … Bethlehem, Pa.-based Concannon Miller has joined the BDO Alliance USA, a nationwide association of independently owned local and regional accounting, consulting, and service firms … For the second year in a row, Houlihan Lokey was awarded The Hedge Fund Journal’s Leading Valuation Firm for 2019.

Please send your professional and firm news to us at


Upcoming BVR training events

  • Valuation and Technology: A Panel Discussion (Keynote Quarterly) (March 13), with Lorenzo Carver (Liquid Scenarios), Greg Endicott (ValueVision), Joseph French (Intrinio), Sushil Chacko (Carta), Bharat Kanodia (IHS Markit), Steven Liu (Solium Analytics), and Adam Manson (Business Valuation Resources).

    See examples of how technology is transforming valuation practices today and learn what technology you should consider. This webinar is in partnership with the North California Chapter of the ASA.

  • Valuing Common Stock After a Series A Financing (March 14), with Joel Johnson (Orchard Partners Inc.). Part of BVR’s Special Series on Fair Value.

    Don’t look to conventional valuation techniques to value common stock in an early-stage company that has completed a Series A preferred stock financing. This webinar shows how to use the option-pricing method to backsolve to the Series A value.

New and trending LinkedIn discussions

The Absence of a Size Effect Relevant to the Cost of Equity

Is a Merger Causing a Culture Clash in Your Organization?

OPM Backsolve and Convertible Debt Financing

Your discussion could be featured here—BVR’s LinkedIn group is a place for valuation professionals to share, discuss, and learn about compelling BV topics. If you’re not already a member, request to join today.

We welcome your feedback and comments. Contact Andy Dzamba (Executive Editor) or Sylvia Golden, Esq. (Executive Legal Editor) at:

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