Business Economics
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Great Western Directories v. Southwestern Bell
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This antitrust case received the National Law Journal's "Silver Award" in
1996 for demonstrating that a plaintiff could prevail in an intent case.
The case is also notable, and frequently cited, for the proposition that
antitrust injury can occur even where the injured firm continues to thrive.
In this case, twice upheld by the Fifth Circuit on Appeal and settled while
on cert to the Supreme Court, Spectrum developed statistical models to define
the relevant product market and to show pricing differentials in competitive
and monopolized markets. We have performed similar antitrust analyses in
matters involving other publishers and telephone utilities.
Crown Building Supplies, Inc. v. Peachtree Doors, Inc.
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Distributor Crown alleged breaches of an agreement by manufacturer Peachtree
regarding credit and other terms of trade forced it out of business. By analyzing
industry and company financial data, Spectrum was able to successfully
demonstrate that the low sales volume and profitability of Crown were largely
due to poor merchandising, insufficient capitalization and inadequate product
offerings totally unrelated to the alleged breach.
Bluebonnet Savings Bank v. Federal Deposit Insurance Corp
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In this "Winstar" case involving a Southwest Plan savings & loan
institutions, Spectrum appraised the value of the equity of this $3 billion
financial institution, assessed the impact of the government's actions, damages
incurred by stockholders as a result of the FDIC's breach. Our appraisal
made use of statistical methods in selecting comparable firms and calculating
"but for" market to book value ratios. Phase I of this case settled for a
nine figure amount and Phase II is currently before the U.S. Court of Claims.
Eckholt v. ABI
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This case was brought by ABI's former chief executive officer who was terminated
by the seminar company due to inadequate operating performance and sought
damages based on a "buy-out" clause in his employment contract. By analyzing
the company's historical database of seminar planning and performance, Spectrum
demonstrated that the firm's downward trend corresponded with the plaintiff's
tenure and direction and traced many of the problems encountered by the company
with specific programs initiated by the former CEO. In addition, Spectrum
demonstrated that when obvious errors in the financial analysis and valuation
done by plaintiff's damage expert were corrected, the value of the plaintiff's
claim was less than the minimum buy-out specified in his employment contract.
Nevada Power Company v. Monsanto Company
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Nevada Power claimed a loss due to early replacement of transformers because
of PCB contamination of dielectric fluid. We conclusively demonstrated, using
a database of transformers in the field, that the savings in electric
generating costs, which resulted from replacing the transformers more than
offset any loss from early retirement, hence Nevada Power was not harmed,
and that proper electric utility engineering analysis would have led to the
replacement of the transformers notwithstanding any contamination.
Tucson Lightwave, Inc. v. Brooks Fiber
Properties
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Brooks conspired with Tucson Electric Power to secure exclusive access to
TEP's utility poles, which were the only economic method of constructing a
Competitive Access Provider (CAP) network in Tucson. Spectrum analyzed the
conditions in Tucson to show that CAP service is a relevant product market
and that actions of TEP and Brooks harmed consumers in Lightwave.
Cray v. Deloitte
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The plaintiffs alleged that Deloitte conspired with the management of Sooner
Federal S&L to hide the institution's financial condition from investors
by manipulating GAAP Goodwill and failing to recognize real estate losses
in a timely manner. Spectrum provided testimony on the relationship of accounting
treatment of a transaction and its economics, the nature of regulation and
importance of accounting in that regulation, the efficiency of the market
for Sooner's stock and a statistical estimate of the price of Sooner stock
had the market not been defrauded.
National Liberty Corp. v. Wal-Mart, et al
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National Liberty entered into an agreement with Sam's Club and Sedgewick
James to offer an auto insurance program to Sam's members. The program was
canceled by Sam's and National Liberty sued claiming substantial damages.
Spectrum analyzed the damage claims and found them to be greatly overstated
based on both the business plan and historical experience of the plaintiff
and other similar insurers.
NCMC v. Mercedes Benz
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This case is interesting from several perspectives. First, the market is
an unusual one. Second, damages are predicated on a first mover advantage
in a product market with a short duration. Finally, the analysis of harm
to consumers illustrates the cost benefit calculus of settling class action
suits with discount coupons.
Floyd et al v. American Quarter Horse Association
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In this case, a group of breeders alleged that the American Quarter Horse Association's restriction on the number of registration-eligible quarter horse foals, bred from a single mare, constituted a naked restraint of trade. Our findings showed that the rule artificially restricted the supply of "high quality" American Quarter Horses which led to higher prices and inferior quality. Partially as a result of our analysis, the court filed a summary judgment order in favor of the plaintiffs on the antitrust violation.
