Delaware Chancery Court Sides with Analysis Group Expert in Fiduciary Duty Ruling

July 1, 2022

Analysis Group was retained by Ballard Spahr on behalf of the plaintiffs in Joseph C. Bamford, et al. v. Penfold LP, et al., a fiduciary duty litigation brought in the Delaware Court of Chancery against individuals and corporations controlling the Delaware Valley Regional Center (DVRC). The DVRC was formed to help foreign nationals apply for US Permanent Resident Cards under the EB-5 program that was intended to promote investments in qualified job-creating ventures.

An Analysis Group team led by Managing Principal Gaurav Jetley, Vice President Xinyu Ji, and Manager Briana O’Haver supported academic affiliate David J. Denis, who rebutted the defendants’ damages expert’s opinions regarding the reasonable ranges of compensation for the top executive at DVRC. Professor Denis opined on the characteristics of investments made by DVRC-sponsored funds; the return expectations of DVRC’s EB-5 investors; and key considerations when conducting a benchmark analysis for assessing executive compensation, which the defendants’ expert failed to account for properly, rendering his chosen benchmarks incomparable. Professor Denis also testified about other data and analytical flaws in the defendants’ expert’s analysis.

Vice Chancellor J. Travis Laster returned a favorable verdict for the plaintiffs. He wrote in his opinion: “On balance, Denis called into question the persuasiveness of [the defendants’ expert’s] work. The persuasiveness of a study based on comparisons depends on how similar the comparisons are. [The defendants’ expert] failed to establish that his comparisons were sufficiently persuasive, and Denis undermined them further.”