Winning a Debt Portfolio Valuation Lawsuit

April 12th, 2010

In Valuation Disputes,
Count on Proven Litigation Support from Kaulkin Ginsberg

Challenge
A debt buyer specializing in the bank card / credit card sector purchased late stage paper from a debt buyer/reseller.  Post-purchase, the debt buyer assessed the portfolio and realized that the summary-level seller survey they had been provided prior to bidding on the paper was inaccurate. Among other inaccuracies, the survey represented the accounts as having FICO scores that did not fall below a certain range, but in fact, they did.  It indicated that the accounts had not been scored, but in fact they had been.  It also stipulated that the accounts had not been placed with more than two agencies, but this also proved to be incorrect. These misrepresentations had resulted in an overpayment for the portfolio.

The debt buyer sued for damages.  In order to prevail in court, they had to prove that the actual market value of the portfolio they received was less than what they paid.  They needed an irrefutable valuation of the portfolio from a credible third-party source – and they needed someone who was capable of providing authoritative testimony in court to support the valuation.

Solution
The debt buyers researched the marketplace and chose to hire Kaulkin Ginsberg’s litigation support group.  We augment our proven expertise in valuing debt portfolios with professionals who are thoroughly experienced in assisting ARM companies and their counsel in legal situations.  We have a track record of success, and our findings have never been invalidated in court.

We first performed procedures to document that the seller survey was indeed incorrect.  Once this was completed, we assessed the portfolio for the debt buyer to determine the difference between the actual value of the portfolio that was purchased and the value of the portfolio as it was represented to them at sale.  This pricing differential was developed so the court could benchmark damages.  We submitted our findings to the court in written form and then served as an expert witness at deposition.

As a result of the deposition, the reseller decided to settle the dispute directly through arbitration to avoid the lawsuit – realizing that our findings were sound and they were at substantial risk should they proceed to trial.  We served as the sole professional expert during the arbitration process, and the court accepted our benchmarks as the basis for summary judgment.

Result
Because of our expert testimony, knowledge, and credibility in the market, our clients received their desired settlement, favorably comparable to the originally desired judgment and avoided a more prolonged and costly litigation.

What Can We Do For You?

We’ve helped numerous clients prevail in diputes by providing valuation / litigation support and expert witness testimony. Whether you are facing a valuation matter, divorce, partnership dispute, damage assessment, contract claim, employee matter, or are faced with any other pending legal action, we have proven experience to assist you.

Contact Mike Ginsberg,  at 240-499-3800 or by email to confidentially discuss your interests.

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