The Montana Movie Theatre Company (Montana) operates movie theatres in 15 different towns throughout western Montana, including in Missoula, a city of 60,000 people with a major state university. In Missoula, Montana owns and operates five movie theatres with a total of 38 screens. Montana operates the only theatre in Missoula and the theatres within a 30-mile radius around Missoula. Montana charges $6 for matinee movie times and $8.50 for evening movies. These prices are about 10% higher than the prices charged around most of the rest of the state. There are no discount ticket prices of any type for senior citizens, students, or any other group. Most movie theatres around the rest of the state offer some, if not all, special individual or group discounts.

Several other movie theatre companies have sought to build movie theatres in Missoula over the last 10 years. Each of these efforts has failed. In addition, Montana has actively lobbied city authorities to keep out any other movie theatre companies.

1. What are the business and the associated legal issues with Montanas operations?

2. Is there a possible case of monopoly here under federal law? Why or why not?

3. During discovery in a lawsuit situation, what, if any, accounting records should you request if you were engaged by the lawyer for Montana to defend Montana in a monopoly-related lawsuit? If you were engaged by a competitor of Montana to sue Montana in a monopoly-related lawsuit?

4. What other information would you need as a forensic accountant involved in this type of situation defending Montana in a monopoly-related lawsuit? Suing Montana in a monopoly-related lawsuit?

5. What are the services that a forensic accountant, as an expert witness, might be asked to provide in a dispute involving the above scenario defending Montana? Or suing Montana?