ESSAY QUESTIONSCHAPTER 11

131. You have been hired as an expert witness in a federal antitrust case. You are planning your strategy for determining whether or not your client (the defendant in the case) has engaged in predatory pricing. How will you get started? In general what is your strategy? What must you do to successfully defend your client?

132. Describe the nature of intellectual property. What are the challenges for forensic accountants working on intellectual property cases?

133. Explain what is meant by the "Georgia-Pacific factors." Identify at least four of the factors cited by the court in evaluating damages. Why is this case so important in intellectual property cases?

135. Dave Robinson was seriously injured in an accident while working at a manufacturing plant where he had been employed for 15 years. He was 45 at the time of the accident. His doctor has stated that Mr. Robinson is permanently disabled and will not be able to work again. He has sued the company for damages. Describe what the components of his damage claim will most likely include. If the defendant in the case alleges that Mr. Robinson is only partially disabled and has some ability to work, what impact will that have on the plaintiff's expert report?

137. The U.S. Department of Labor Bureau of Labor Statistics publishes tables on "Worklife Estimates." The table provides the average expected remaining time in the work force for individuals with various demographic characteristics. If a person 40 years old was seriously injured in a work-related case and that person stated that he/she planned to work to the age of 65, why would a forensic accountant not merely accept that statement and use it in calculating damages?

PROBLEM

139. Josh worked for the Johnson Boat Works Company as a maintenance welder for 15 years.At the beginning of each five years of employment, Josh signed a five-year work agreement with the company.Soon after Josh had signed a new five-year agreement, Josh was fired by the new owner of the company. At the time of his firing, Josh was making $25 an hour and his employer-paid benefit package, which included health care and other government mandated items, was worth about 20% of his wages. Although Josh started looking for a new similar job right away, it was eight months before he got a new job. The new job pays $22 per hour, but it is on a contract that pays no benefits other than his wages. On advice from his family he recently filed a wrongful discharge case against Johnson Boat Works.

Assume that the Johnson Boat Works Company is found liable for the firing of Josh. Also assume a 40-hour week and a 52-week work year. Josh worked for 13 weeks during the first year at the new job. Assume that he continued to work at his new job for all of years two and three, and that during the fourth and fifth years, Josh lost his contract job and had to work a minimum wage job at $15,000 a year with employer paid benefits that amounted to 10% of his wages.

Required: Using only the information above what is the total amount of damages suffered by Josh during the entire five-year contract period? Show clearly labeled and organized computations. Do not adjust for present value.