Stout was retained by the plaintiff's counsel in a federal trade secret misappropriation matter to assess unjust enrichment and reasonable royalty damages. The parties to the litigation were direct competitors in the online mortgage origination and lending industry. The plaintiff accused the defendant of misappropriating the plaintiff's financial operating model, its operating data, and certain contracts with third-party marketing agents. We prepared a Rule-26 expert report that summarized our opinion of damages which were based on the defendant's avoided development cost.

Stout served as exclusive financial advisor to Seaway Plastics Engineering and Tonka Bay Equity Partners in connection with Seaway's sale to ICG.  

Seaway, headquartered in Port Richey, FL, provides a one-stop solution for complex projects in the medical, aerospace, defense, and precision industrial industries. Seaway has established high standards for excellence and quality within highly regulated industries requiring tooling, plastic injection molding, and secondary operations. Seaway has three locations on the East and West Coast occupying 130,000 square feet and is ISO-13485-certified in all facilities to service a wide range of clients. With over 250 employees and one-third of the workforce averaging 10+ years at Seaway, the team's experience ensures that products are completed with skill and speed for faster turnarounds and a commitment to quality.

Stout was retained by Planmeca, a Finnish manufacturer of high-tech dental 3D-imaging devices, to analyze and testify to a reasonable royalty that would provide adequate compensation to Osseo Imaging LLC ("Osseo") if a trier of fact determined that certain Planmeca ProMax 3D-imaging systems infringed patents held by Osseo. Osseo, the patent holder and plaintiff in the case, claimed that as a result of the alleged infringement, Planmeca should pay a royalty rate of over $5,000 per system, which would have amounted to over $20 million in reasonable royalty damages (and up to $60 million if a jury found Planmeca's infringement to be willful).

A one-week trial was held in Delaware Federal court, where John Bone, a Managing Director with Stout, testified as the damages expert on behalf of Planmeca. Mr. Bone testified that the Plaintiff's royalty model was flawed and that even if the Plaintiff's royalty approach was appropriate, the reasonable royalty could not be more than approximately $1,000 per device if certain corrections to their model were made, which would amount to reasonable royalties of no more than approximately $3.9 million. Mr. Bone also testified that a more proper approach to determining the reasonable royalty would have amounted to a reasonable royalty of $200 per device, which would amount to reasonable royalties of approximately $700,000.

After hearing all of the evidence and testimony that were presented during the course of the trial, the jury found that Planmeca infringed the Osseo's patents but only awarded $2.3 million in damages, which was the midpoint of the two royalty estimates that Mr. Bone testified to at trial. Mr. Bone was assisted by Candice Cornelius and Maureen Tracey from Stout.

Accounting Standards Codification (ASC) 842, Leases, is effective for private companies with fiscal years beginning after December 15, 2021. As a result, Stout's client was required to adopt the standard as of January 1, 2022.

The scope of the engagement was to assist the Company with its implementation of the standard, including the following:

• Identifying all contractual arrangements that met the definition of a lease in accordance with ASC 842
• Extracting all relevant data from each lease
• Calculating the lease liability and right-of-use (ROU) asset for the Company's lease portfolio, including all transition and ongoing journal entries through the end of the lease terms
• Drafting audit-ready technical accounting memoranda
• Drafting the financial statement footnote disclosures
• Creating a template that the Company could leverage for lease arrangements entered into after adoption of the standard

Stout was engaged by The Controller's Office of Philadelphia to conduct a review and analysis of the Philadelphia Police Department and Other Related Police Spending. We completed the review and analysis with support from the Center for Policing Equity and Horsey, Buckner & Heffler. The review sought to understand the PPD's deployment of budgeted funds and resources as well as to recommend improvements to the department's strategy of resource allocation.

The review included a detailed report on current challenges to PPD operations. The report also recommended ways PPD could allocate its resources to improve the department's operational efficiency. Recommendations included the following:

• Constructing a budget based on needs specifically communicated by the communities the PPD serves, and determining personnel/program requirements based on the stated needs of the community
• Establishing the amount of labor needed by PPD to operate effectively in each district, and understanding which roles must be staffed by sworn personnel and which roles may be able to be staffed by civilians
• Building the community's perception of police legitimacy and credibility through ongoing conversations with residents, soliciting and analyzing detailed feedback that can directly inform how and where to allocate resources
• Assessing recruitment and retention strategies through comprehensive data collection, examining strategies that demonstrate success and the points in which candidates often exit the hiring process
• Modernizing systems and processes in order to remove both inefficiencies and redundancies within PPD, such as removing unnecessary paper processes and utilizing software and other technology for improved communication and personnel data management
• Integrating strategies developed from community feedback with comprehensive internal and external data that can create iterative processes of review, strategy development, evaluation, and refinement

The report and its recommendations are meant to provide PPD actionable insights to both improve public safety outcomes and build legitimacy with the communities that it serves through effective dialogue with the residents about community concerns and potential solutions that could successfully address them.

Stout served as the exclusive sell-side financial advisor to UCC Environmental in connection with its sale to Clavis Capital Partners, a private investment firm based in Dallas, Texas, and Green Hills Partners, a family office based in Nashville, Tennessee.

Founded in 1920, and family-owned for over 100 years, UCC is a provider of mission-critical engineered environmental solutions and performance parts for wastewater treatment, solids handling, and air pollution control technologies in power generation and other heavy industrial applications. The Company offers a full suite of design and engineering technology capabilities, including planning and consulting, engineering, project management, production, validation, installation and commissioning, and aftermarket sales, service, and maintenance. UCC is a global enterprise, headquartered in Waukegan, Illinois, with international operations in Germany, India, Thailand, and China.

Stout advised Tire Rack, the leading independent tire tester and consumer-direct source for tires, wheels, and performance accessories, on its sale to Discount Tire, the largest independent tire retailer in the U.S. We served as exclusive sell-side financial advisor to Tire Rack in connection with the transaction.

Stout’s Legal Management Consulting team was engaged to review a global chemical manufacturing company's contracting processes and technology. We evaluated opportunities for enhancement and streamlining the company’s contracting workflows, and we evaluated the existing system fit for meeting current and future contracting needs.

The company struggled with a lack of adoption of its current contract lifecycle management (CLM) system due to overly complicated system design, confusing workflows, a non-intuitive interface, and poor system performance. These obstacles were leading to business risk (contracts being negotiated and stored outside of the CLM system), user frustration (individuals being unable to find important contract documents and data) and a support and training burden on key legal team members and contract coordinators.

• Conducting a user feedback survey across 250 users
• Gathering input from seven primary business areas
• Documenting business requirements and needs
• Performing system evaluation to assess four alternative contract lifecycle management (CLM) systems
• Orchestrating side-by-side sandbox reviews of two finalist systems

Our assessment proved that there were opportunities to better leverage alternative CLM technology to provide more value and efficiency to the company. Beyond replacing the current CLM system, we also recommended the client that the client perform the following:

• Rollout a new universal workflow, streamline processes, minimize data inputs, require eSignature in system, and improve contract monitoring
• Redesign its system to make it more user friendly, address amendment tracking, and enhance system notifications
• Clearly define roles of system administrator, business user, contract coordinator, and legal
• Create a governance model for support and continuous improvement

Neil Steinkamp, Managing Director at Stout, Transformative Change Consulting, testified on the impact of inadequate compensation for counsel in both criminal and family court 18-B assignments in New York. Mr. Steinkamp's research and analyses found the inadequate compensation may discourage participation of attorneys, diminish the quality of representation for those utilizing state-provided counsel, and may ultimately result in less favorable outcomes for defendants that create unnecessary fiscal burden and social safety net costs.

Mr. Steinkamp explained that low hourly 18-B rates (which are significantly less than hourly costs to operate a small firm in New York City) and maximum payment caps may discourage experienced attorneys from participating in both criminal and family court and may deter lawyers who are burdened by student loans from participating in the system. Those who do participate may be incentivized to take on a large mass of cases and perform the minimal amount of work required to make ends meet financially. As such, assigned counsel attorneys many be unable or unwilling to give their cases the attention they deserve, which can lead to mishandling of cases, few attorneys participating in the assigned counsel system, and significantly worse outcomes for defendants, and increased social safety net costs that could have been avoided.

Stout was hired to manage and deliver on the fresh-start accounting adoption upon the emergence from Chapter 11 bankruptcy for a public real estate investment trust (REIT). More than 45 professionals across five service areas – Real Estate Valuation, Business Valuation, Complex Securities & Financial Instruments, Accounting and Reporting Advisory, and Project Management Office (PMO) Services – collaborated on this project.

Work included:

• Determined multi-billion-dollar enterprise value of the reorganized entity
• Performed real property valuations of over 200 properties (greater than $3.5 billion in property valued and over 50 million square feet)
• Performed valuations on over $1 billion in outstanding debt (including 40+ properties and multiple corporate debt instruments)
• Supported the client's technical accounting and financial reporting by preparing or reviewing necessary accounting memos, schedules, and disclosures related to ASC 852. Our work included, but was not limited to, complex and convertible debt analysis, variable interest entity analysis, documentation of accounting policies, and required tests and disclosures under ASC 852
• Provided PMO services throughout the project. The PMO supported company management's strategic direction by ensuring adherence to plans, by identifying, remediating, and resolving issues, and by coordinating effective communication between and among senior company management and various service providers

Stout served as exclusive financial advisor to SG Homecare, Inc. in connection with its sale to Sverica Capital, a Boston-based private equity firm specializing in acquiring founder-owned businesses in the lower middle market.

Founded in 2001 and headquartered in Costa Mesa, CA, SG is a leading supplier of durable medical equipment (DME) and single-use medical supplies to the home care market in California. The Company serves members of many of the leading health insurance plans and health networks and is well positioned to partner with its customers to capitalize on the DME industry shift to risk-sharing payment models that better manage utilization of medical equipment. DME and Home Healthcare suppliers are experiencing favorable tailwinds as hospitals discharge patients to the home earlier in the continuum of care to save on costs and improve outcomes.

Stout provided buy-side financial due diligence services to a healthcare fund that focuses on the healthcare services and healthcare technology sectors. The client was performing a roll-up of seven regional medical imaging technology sales and service companies.

Financial diligence was performed on seven distinct companies. We established a consolidated databook to present the diligence adjusted financial statements of the seven companies along with synergies identified by our client. The databook and reports were utilized by the client to obtain the lending necessary to complete the transaction. Our diligence was focused on quality of earnings, quality of assets / net working capital (NWC), and net debt. Our client also engaged us to perform site visits and observe inventory at each of the companies' sites.

Diligence was performed concurrently on all seven transactions, all of which closed within 60 days of each other. We assisted the client with NWC true-ups for each transaction, one of which resulted in dispute. The client recovered 100% of the disputed items. Additionally, we assisted the client with a purchase price allocation for all seven transactions.

We performed financial reporting services for a company in the consumer packed goods industry and served as key members of its financial reporting team. Our services helped to ensure that the Company's Q1 10-Q and all required disclosures were in compliance with U.S. GAAP.

While we were serving the Company, the essential personnel of the Company's finance and accounting department left (i.e., the CFO, Controller, and Director of Financial Reporting). We began managing the Company's entire 10-Q process, such as filing the 10-Q, implementing edits from all relevant parties, controlling required elements outside of the financial statements and footnote disclosures, and managing the teams and expectations of the filing.

Ultimately, the Company was able to file its first quarterly filing through the SEC without needing to file for an extension.

A middle-market private equity firm with deep experience in the medical and industrial industries identified one of its portfolio companies as a target for a potential continuation vehicle transaction. The company, a manufacturer and distributor of industrial filtration mediums, was a seasoned investment that the private equity firm believed to have consolidation and growth opportunities to pursue under its ownership.

Stout was engaged to provide fairness opinions to the fund general partner and the board of directors in connection with the proposed transaction. Our team performed independent financial analyses regarding the business and proposed transaction terms and presented its findings to the general partner. The private equity firm completed the transaction with the continuation vehicle. Additionally, the existing platform company also acquired a competing provider of filtration products with financing support from the newly formed continuation vehicle.

Retained in patent litigation case for large financial services company We were retained on behalf of a large financial services company in patent litigation involving mobile check deposit technology that had been filed against it by another large financial services company. The patents had been asserted against our client in two separate cases, and our work was focused on the second of the two cases.

Our work included the issuance of multiple reports addressing damages (assuming liability was found) as well as rebutting the other side's damages claim.  Eventually, the case went to trial in Marshall, Texas, in mid-September 2022.  Leading up to the trial, the other side had been involved in three prior jury trials in Marshall related to its mobile check deposit technology, with those juries awarding it $200 million, $102 million, and $218.45 million, respectively.  

At the September 2022 trial, the plaintiff's expert asked for damages of $80.5 million covering a period of approximately 14 months, and Julie Davis of Stout testified that damages instead should be a lump-sum of $4.3 million for the life of the patents. The jury returned a verdict finding that our client had infringed the asserted patents, but awarded damages in the amount that Ms. Davis had opined: $4.3 million for the life of the patents.

This case demonstrates our team's expertise in working with counsel to develop, defend, and present damages opinions in a manner that resonates with juries.