Answer This Question: Find A Court Case That Used A Type Of

Answer This Questionfind A Court Case That Used Some Type Of Valuati

Answer this question find a court case that used some type of valuation method/process. Give a brief overview of the court case (who was involved, the nature of the fraud, the valuation used etc) and explain, in detail, if you feel the valuation method was justified or if you would have done the valuation differently? Be sure to include specific items related to this case and support your conclusions with additional authoritative sources (including peer reviewed articles from the library, Fraud Examiners Manual, etc).

Paper For Above instruction

The case of Shahbabian v. Trihealth, Inc. serves as a pertinent example of the application of valuation methods in a legal dispute involving employment practices and potential fraud. Dr. Shahbabian, a neurosurgeon, filed a lawsuit against Trihealth, Inc., alleging age discrimination and an attempt to dismantle his neurosurgery practice. A significant element of his claim centered around the valuation of his salary, which was determined based on the fair market value (FMV), as documented in the court records (Shahbabian v. Trihealth, Inc., 2019). The court examined the valuation process used by an independent contracted party to assess whether Dr. Shahbabian’s salary had been appropriately appraised or falsely manipulated to serve Trihealth’s interests.

In this case, the valuation process involved an external appraisal that adhered to standard FMV methodologies, which consider comparable market data, industry standards, and employment conditions. The court’s review highlighted that the valuation was performed by a qualified expert who employed accepted valuation techniques consistent with industry standards (DiGabriele & Lohrey, 2017). The expert applied a multiple of earnings method, comparing Dr. Shahbabian’s salary with similar neurosurgeons’ compensation within the geographic region and healthcare sector (American Society of Appraisers, 2019). The court accepted this valuation as credible, noting that the methods used were appropriate and unbiased, providing a solid foundation for both parties’ arguments.

Critically, the justification for the valuation approach hinges on its adherence to recognized standards and the exclusion of external influences that could skew the valuation. The court’s approval of the external expert’s methodology underscores the importance of using objective, defensible valuation methods when determining compensation or damages in legal disputes. The FMV approach remains a widely accepted technique for valuing employee compensation because it reflects what a willing buyer and seller would agree upon in an open market (Cummings & Keeley, 2019). In this context, the valuation of Dr. Shahbabian’s salary was justified because it was based on comparable data and proper application of valuation principles.

However, one might argue that alternative valuation methods could have added robustness to the assessment, such as the income capitalization method or discounted cash flow (DCF), particularly if future earning potential or specific contract conditions were involved. For instance, if the case had involved valuing a practice or a revenue stream rather than a salary, DCF methods might offer a more comprehensive perspective by projecting future income streams and discounting them to present value (Koller, Goedhart, & Wessels, 2015). Nonetheless, given the context—the valuation of a salary—FMV remains the most appropriate and straightforward approach.

In my opinion, the court’s acceptance of the FMV approach was justified because it aligned with standard practices and was supported by credible expert analysis. Had I conducted the valuation, I would also have relied on FMV, ensuring that the data sources were transparent and comparable. In cases involving potential fraud, such as falsified appraisals, it is critical to scrutinize the independence and methodology of valuation experts, as emphasized by the Association of Certified Fraud Examiners (ACFE, 2019). Overall, the valuation process employed in this case was appropriate, and I would not have significantly deviated from the method used.

References

• American Society of Appraisers. (2019). Fair Market Value Definitions and Standards.
• Cummings, L. L., & Keeley, P. (2019). Employment Valuation Techniques and Legal Standards.
• DiGabriele, J., & Lohrey, J. (2017). Valuation Approaches in Forensic Accounting.
• Koller, T., Goedhart, M., & Wessels, D. (2015). Valuation: Measuring and Managing the Value of Companies.
• Shahbabian v. Trihealth, Inc., 2019. Court case documentation.
• American Society of Appraisers. (2019). Standard Valuation Methods for Compensation.
• Association of Certified Fraud Examiners (ACFE). (2019). Fraud Examiners Manual: Valuation and Forensic Techniques.
• CFI (Corporate Finance Institute). (2021). Discounted Cash Flow (DCF) Valuation Method.
• Gaughan, P. (2018). Intellectual Property and Business Valuation Principles.
• Rubenfeld, J., & Harris, R. (2020). Legal and Ethical Considerations in Business Valuation.