Michael B. Lehner, CPA/ABV, CFE, ASA
732-412-3825
MLehner@zbtcpa.com
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Save time and money with rebuttal business valuation reports

rebuttal business valuation reports.

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A defense attorney will often wait until the plaintiff’s attorney submits a valuation report. Then, the defense hires its own expert to prepare a “rebuttal report,” rather than pay for a separate full-blown valuation report. This strategy can be a cost-effective way to poke holes in the opposing expert’s analyses, but rebuttals are only effective when they’re detailed and accurate.

Beyond critiquing

A rebuttal report that identifies flaws, weaknesses and mistakes in the opposing expert’s report can provide valuable insight. An attorney can use the rebuttal critique to develop his or her own technical cross-examination questions. But if a rebuttal report doesn’t revise the original expert’s calculations, it probably won’t help a judge or jury quantify damages or value a business interest.

In some cases, courts have rejected the rebuttal expert’s testimony simply because the expert didn’t provide his or her own revised estimates. A rebuttal report that merely criticizes another expert’s work without providing an alternative methodology or analysis may be seen as biased and lacking in substance.

Alternatively, both sides might hire one joint rebuttal expert when their respective experts arrive at widely divergent conclusions. This third expert can help the court identify sources of the parties’ discrepancies, instead of simply splitting the difference between the experts’ estimates. In addition, the rebuttal expert can provide authoritative reference materials to help the court work through the issues and achieve accurate conclusions.

Written vs. oral reporting

If a rebuttal expert is going to testify in court, you might wonder whether a written report is necessary. Sometimes it makes sense for a rebuttal expert to provide oral testimony. Oral-only testimony can save money, because the expert doesn’t spend time writing a report — and it also can introduce an element of surprise into the case.

On the other hand, oral testimony about complex financial matters can be difficult for laypeople to understand and recall, especially when it’s the only way that an expert communicates about his or her analyses and conclusions. A written report that gives the judge and jury a document to consult is usually the preferred format for both valuations and rebuttals.

Table of contents

Written rebuttal reports typically take the form of memos or letters that describe:

  • The rebuttal expert’s methodology,
  • Key errors and discrepancies,
  • Authoritative references to textbooks and reputable websites, and
  • Exhibits that quantify the effects of the other experts’ errors, omissions or discrepancies on their conclusions.

Often alternative amounts are quantified for each error separately, cumulatively and in various combinations to help triers of fact decide cases. A strong, relevant rebuttal goes beyond critiquing another expert’s report. Objective rebuttal experts identify areas of agreement as well as all errors, omissions and discrepancies — not just those that support their attorneys’ theories or their clients’ financial interests.

Hard work

Most clients don’t realize how much time and effort goes into preparing a rebuttal report. In addition to evaluating the opposing side’s conclusions, a strong rebuttal provides enough detail — usually in a formal written format — to help the judge and jurors understand the valuation process. This, in turn, results in more informed decisions about the value of a business interest or an estimate of damages.

Michael Lehner


This publication is distributed with the understanding that the author, publisher and distributor are not rendering legal, accounting or other professional advice or opinions on specific facts or matters, and, accordingly, assume no liability whatsoever in connection with its use. In addition, any discounts are used for illustrative purposes and do not purport to be specific recommendations.