Economics Expert’s Stock Valuation Opinions Admitted

Plaintiffs Thomas O’Keefe, Kenneth Cunningham, Joseph Lewis, Brian Judge, Byounghoon Ahn, Dione Heusel, Betsy Riggs, and Thomas West are former executives and employees of Defendant Smoothie King Franchises, Inc.

This action arises out of Defendants’ allegedly wrongful decision to terminate
Plaintiffs’ stock options in SK USA, Inc.

Plaintiffs engaged expert Craig J. McCann, Ph.D. and CFA, “to provide an analysis of the value of the Plaintiffs’ options on stock of SK USA.”

However, Defendants filed the motion to exclude McCann’s testimony based on three reasons: (1) McCann failed to adhere to the applicable professional standards in his field; (2) McCann’s stock valuation opinions focus on irrelevant time frames; and (3) there is too great an analytical gap between the facts of this case and McCann’s analysis.

Economics Expert Witness

Craig J. McCann, Ph.D. is Principal, SLCG Economic Consulting, LLC. He has taught graduate investment management at Georgetown University and at the University of Maryland, College Park. McCann is a Chartered Financial Analyst.

McCann received a B.A. and an M.A. in Economics from the University of Western Ontario and a Doctorate degree in Economics from the University of California, at Los Angeles.

Want to know more about the challenges Craig McCann has faced? Get the full details with our Challenge Study report. 

Discussion by the Court

In his expert report, McCann summed up his findings with two main points:

1. Value Based on Stock Sale: He calculated that each of the Plaintiffs’ stock options was worth about $3,164 using a standard valuation method (called the OPM backsolve) based on SK USA Holdings’ recent sale of preferred stock.
2. Real Value is Higher: He argued that this number is too low because the company’s main shareholder deliberately chose to raise $100–$130 million in a way that avoided selling stock, which suggests the stock was more valuable than the sale price implied. Based on this, McCann concluded that the plaintiffs’ stock options were actually worth between $3,337 and $3,619 each.

He also presented a table showing how the options’ value would change if the company’s total value was between $700 million and $800 million (as supported by private equity offers and executive testimony). In that case, he said the options would be worth $3,246 to $3,743 each — again, more than the $3,164 calculated using the first method.

Motion to Exclude

Defendants argued that the Court should exclude McCann’s testimony because he admitted that he did not adhere to the Uniform Standards of Professional Appraisers, the International Valuation Standards, the American Society of Appraisers’ standards, the National Association of Certified Valuators and Analysts’ standards, or the Association of International Certified Professional Accountants’ (“AICPA”) standards in forming his opinions.

Defendants further argued that McCann violated industry standard by not using multiple methods to calculate the value of Plaintiffs’ stock options.

Additionally, Defendants argued for exclusion of McCann’s testimony based on the dates he valued the Plaintiffs’ stock options. According to Defendants, the relevant date for the valuation of Plaintiffs’ stock options is the date the alleged breach of contract occurred.

Finally, Defendants sought to exclude McCann’s testimony, arguing that there is too great an analytical gap between the facts he considered and the opinions he reached.

Analysis

However, the Court found McCann’s opinions to be relevant and reliable and found that his testimony will aid the jury in resolving the factual dispute as to the value of the Plaintiffs’ stock options. The Court was convinced that McCann’s reasoning is scientifically valid.

Basically, the criticisms raised by the Defendants all are related to the bases and sources for McCann’s opinions.

Held

The Court denied Defendants’ motion to exclude the testimony of Craig McCann.

Key Takeaway:

As a general rule, questions relating to the bases and sources of an expert’s opinion affect the weight to be assigned that opinion rather than its admissibility and should be left for the [factfinder’s] consideration. Furthermore, experts may rely on one version of disputed facts in forming their opinions. Any weaknesses in his testimony based on questionable assumptions may be dealt with on cross-examination.

Basically, the Court is convinced that the Defendants will effectively cross-examine McCann as to the bases and sources of his valuation opinions and will highlight any weaknesses in his testimony for the benefit of the jury.

Case Details:

Case Caption:	O’Keefe Et Al V. Smoothie King Franchises, Inc. Et Al
Docket Number:	2:24cv2094
Court Name:	United States District Court, Louisiana Eastern
Order Date:	September 09, 2025