Valuation and fairness-opinion economist

Expert class library · Bankruptcy and valuation · Either side

Values a company or block of shares at the moment of a merger, buyout, ESOP purchase or restructuring, using discounted cash flow, comparable companies and precedent transactions, and tests whether the price paid was fair. Testifies in appraisal and fiduciary-duty trials, ERISA stock-purchase cases and bankruptcy confirmation fights, where courts measure the result against the deal price and the market's own evidence of value.

What this expert is retained to answer

• What was the fair value or fair market value of the shares on the valuation date, and how does it compare with the price actually paid?
• Were the management projections prepared in the ordinary course of business, or for the deal, a lender or the litigation, and could the company fund the plan they assume?
• How was each input to the discount rate chosen, including beta, size premium and any company-specific premium, and has the expert used that method outside this case?
• Why were these comparable companies and transactions chosen, and which were left out?
• If the company ran a real sale process, why should the court prefer a model over the price the market paid?
• Has the expert disclosed the data and calculations behind each input so the other side can test them?

Methods

• Discounted cash flow analysis
• Comparable companies and guideline public company multiples
• Precedent transaction analysis
• Cost of capital (WACC) build-up
• Reconciliation to deal price and market evidence
• Option pricing for warrants and contingent claims

How the testimony is attacked

• Inputs invented for the case. Opponents attack a discount rate input built with a method the expert devised for the litigation. In Manichaean Capital v. SourceHOV Holdings the Court of Chancery said the company's expert's novel way of estimating beta for a private company raised serious admissibility issues under Daubert, found it unsupported by the record, and rejected the company's fair value presentation.
• Projections that are hopes rather than forecasts. Defendants attack a DCF that rests on marketing projections for a company that cannot fund its plan. In Jacobs v. Akademos the court rejected the minority holders' DCF because its projections were overly optimistic, assumed capital no one would provide, and included businesses that had not launched, and the Delaware Supreme Court affirmed.
• Undisclosed data behind a key input. Challengers argue an input cannot be tested when the spreadsheets behind it were never produced. In In re Sabine Oil & Gas the bankruptcy court accepted the Black-Scholes method but held the debtors' banking witness's volatility estimate inadmissible because no one could see how he derived it from the reference companies.
• Financial data the expert did not verify. Opponents argue a valuation built on numbers supplied by the client, not the company's books, has no reliable foundation. In Zachman v. Real Time Cloud Services the court treated that objection as one of credibility and denied a Daubert motion, but after trial found the expense figures were guesses and did not adopt the DCF.
• Ignoring the deal price. Opponents portray a valuation far above or below the deal price as a litigation outlier. Delaware courts begin with market evidence when there was a genuine sale process, but in Manichaean Capital both sides agreed that a private company with no sale process offered no reliable market price, so the court relied on DCF alone.

What the public record shows

A deliberately narrow CourtListener search, ("precedent transactions" OR "precedent transaction" OR "fairness opinion") AND "discounted cash flow" AND (Daubert OR "Rule 702"), returned 5 opinions filed since 2015, as of October 3, 2026; broader searches return more. 4 rulings that show how courts handle this class of testimony:

Each case links to the free opinion text on CourtListener.

Under amended Rule 702

Since December 1, 2023, Rule 702 says expressly that the party offering an expert must show the court it is more likely than not that the testimony meets each requirement: that it rests on sufficient facts or data, uses reliable methods, and reflects a reliable application of those methods to the case. Questions about the basis of an opinion are no longer automatically matters of weight for the jury. For how the circuits have applied the amendment, see the Rule 702 tracker, which follows each court of appeals; for what that means for preparing or attacking this class of expert, see the guide on amended Rule 702.

Related classes

• DCF business valuation expert
• Solvency expert
• Commercial damages rebuttal expert

Guides

• Amended Rule 702 After Nearly Three Years: What Courts Exclude

Simulating this class on a matter

Supreme Mind simulates a class of expert, never a named individual, on your fact pattern and returns the likely opinion, the ranked cross-examination weaknesses, the Rule 702 attack surface and what it means for settlement. Read how it works, or book a demo.

Last reviewed October 3, 2026. How this page is built: rulings are found by searching court opinions on CourtListener, and each one is read in the opinion before it is summarised here; outcomes are labelled by what the court did with the expert's testimony. No individual expert is named. This page summarises public decisions for orientation and is not legal advice; read the opinion before relying on any ruling.