The Judicial Perspective

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The Judicial Perspective

By: Joy M. Feinberg



No matter how good or bad we think our trial presentations appear, the ultimate test is in the eye of the decision-maker — the judge. All practitioners ponder what it is that sells their perspective to the court. Presented here are the views of two highly respected judges who have spent most of their judicial careers in the Circuit Court of Cook County, Illinois, Domestic Relations Division.


Judge Edward Jordan has presided over domestic relations cases for eight years. Prior to becoming a judge, he was in private practice for 22 years, during the last 15 to18 years of which he handled numerous and diverse divorce cases. Even with this history of experience, he notes that he handled very few business valuation cases before becoming a judge. But in his years on the bench, Judge Jordan has formulated very strong opinions. He teaches his view to both practitioners and those newly assigned divorce judges (whom often have far less divorce experience than he) who seek his counsel.


Judge Jordan advises having detailed reports that explain the reasoning of the expert witness. He finds that points are usually not made when the expert relies on such catch phrases as “I used my experience and judgment,” even though such a response can be perfectly appropriate in certain circumstances. Nonetheless, the more detail and explanation for a course taken, the more the expert’s credibility is enhanced. This necessarily assumes that the position being taken is also credible.


The judge waits to hear how many factors the expert considered and explored. The more factors considered, the greater the expert’s credibility, as the expert is enhancing the theme of thoroughness used in reaching the conclusions being propounded. This detail also helps the judge analyze what the expert has done. Judge Jordan notes that he has great leeway in rendering his decision of value. Case law allows him to determine a value anywhere between the extremes submitted by the experts. Thus, if he disagrees on a rate or percentage used, he can make his own “haircuts” or “enhancements” given the details presented.


Judge Jordan judges “credibility” rather traditionally. He assesses the following:

  • Is the methodology used sound and recognized by peers and colleagues?Did the expert use or follow all of the steps required or recommended in that recognized methodology? Deviations will raise a red flag that must be thoroughly explained, and, he notes that it is wise to anticipate and “front” the cross-exam which will surely follow.

  • Is this recognized method the correct method of value for this jurisdiction and this business?

  • The area least likely to bolster the judge’s perception of the expert is the area of credentials. While they are helpful and often impressive, they are just the beginning. Whichever expert better explains the factors used in the calculations, as well as why they were used, in an atmosphere of sound reasoning and within the economic realities then existing will more likely carry the day.

  • In a court system that often sees months of delay between the valuation date of the report as opposed to the trial date, the judge wants to know whether current events in the business world have caused changes to the value given. Judge Jordan believes that the current business atmosphere is far more important than what went before, which is emphasized by the current state of the economy as we view it today. This allows the judge to analyze whether or not the experts were too optimistic or too conservative in the analysis of value. Judge Jordan emphasizes that this is not a credibility test; rather, it is a practical examination of how the immediate present impacts the analysis of value in the eyes of one who judges the fairness of value as presented by the experts.


Knowing how your judge thinks, or at least believing that you do, helps the practitioner strategize. Judge Jordan is emphatic that the expert should provide a definite number for value, rather than presenting a range of value. Said Judge Jordan, “I don’t want a range! If you’re an expert, have enough confidence in your work to give me a number. Range is the judge’s job. This is not a negotiation.”


Knowing your judge in such matters is critical. Consider this opinion given from other judges interviewed over time: When so many critical numbers in the valuation process can easily be “correct” within a range — a point or more up or down from what the expert has selected — then how can only one number be appropriate? Some judges believe that the expert’s credibility is enhanced by providing a range of value or by agreeing under cross that a number selected within a range, as determined by various changes in such things as the cap rate or percentage discount, is also appropriate.


One important factor to consider is that many judges have never encountered Business Valuation issues or cases prior to having a case come before them. This lack of experience is often compounded with a background devoid of finance and accounting principles. These judges do not come equipped with an understanding of the basic concepts of valuation and, unlike the practitioner without experience, judges have no expert to spoon feed them through the educational process.


Judge Nancy Katz has been sitting in the Cook County, Illinois, divorce courts for two years. Her background was with the Illinois Department of Children and Family Services, the Legal Assistance Foundation and the American Bar Association. Judge Katz notes that there is a difficult balance between educating the judge and being patronizing. However, she is honest in saying, “Don’t assume that I know basic accounting principles.” She is also not afraid to say so if she is lost during the expert’s testimony and asks that information be repeated and explained to her understanding. She will often ask clarifying questions, but she has no desire to take over the trial. She knows that there may be a strategic reason why counsel is asking certain questions and not asking others. Judge Katz favors demonstrative evidence to assist her in understanding the testimony as well as everyday life analogies that put concepts into a more easily understood context. She says that she has to work hard during such trials to fully grasp the evidence. However, she is smart, willing to work at it and determined to understand the issues.


Ultimately, Judge Katz sees herself always returning to the basic issue: What is a willing buyer willing to pay to a willing seller for this business? She is guided by appropriate selection and proper use of all components of the valuation methodology in assessing the expert’s credibility. She searches for a middle ground and areas where the experts agree during her analysis. She will also look carefully at any changes in practices before and after litigation commences to determine if there is a valid reason for such changes.


Like most judges, Judge Katz’ best advice is to break down the information into understandable components and build each block into the result you desire, while bringing the less experienced judge along as you do your work in presenting your case and your conclusions to the court. These are words of wisdom for all practitioners.


Note: Judge Edward Jordans died in 2012. Judge Katz is now a mediator at JAMS in Chicago.