Management Consulting Expert Witness' Opinions on Market Valuation of a Trademark Excluded

Management Consulting Expert Witness’ Opinions on Market Valuation of a Trademark Excluded

This is a case under New York’s Debtor & Creditor law to set aside a February 2019 transfer of the “Halston” and “Halston Heritage” trademarks to Defendants. Comfortex, a garment manufacturer based in Hong Kong alleged that Xcel had used its domination over House of Halston (“HOH”) and its wholly owned subsidiaries (defined below as the “Halston Entities”) to obtain the trademarks for $9 million when the Halston Entities were insolvent and fair consideration would have been $21 million or more.

On July 6, 2018, Xcel obtained an appraisal of the trademarks prepared by Consensus Securities LLC. By August 4, 2018, the Halston Entities owed the Bank of HaPoalim, an Israeli bank, approximately $5.5 million dollars. On October 9, 2018, Xcel and the Halston Entities signed a letter of intent to transfer the “Halston” and “Halston Heritage” trademarks to Xcel for $11 million dollars. Consensus provided a second appraisal of the trademarks to Xcel on November 18, 2018.

At some time before January 2019, Xcel asked Consensus to prepare a fairness opinion to determine an appropriate purchase price for the “Halston” and “Halston Heritage” trademarks. On January 23, 2019, Consensus Valuation Benchmarking and Analytical Services had presented its findings (the “Consensus Report”). The Consensus Report provided a $17,170,000 low value estimation, $21,655,000 middle value estimation, and $29,088,000 high value estimation. On October 31, 2022, Xcel served an expert report prepared by Andrew Jassin. Jassin provided an expert opinion on the elements of a fair market valuation of a trademark and whether the Consensus Report had included a fair market valuation of the “Halston” and “Halston Heritage” trademarks.

Plaintiff Comfortex Company Limited filed a motion pursuant to Federal Rules of Evidence 403 and 702, to exclude the opinion testimony and expert report of Andrew Jassin.

Management Consulting Expert Witness

Andrew V. Jassin is founder and managing director of the Jassin Consulting Group, a management consulting firm providing strategy development and implementation services exclusively to the fiber, textile, apparel and home furnishings industries and related supply chain companies.

In 1989 he formed the Marketing Management Group, Inc. (“MMG”), a consulting firm which helped fashion and retail businesses function effectively and provided independent expert counsel to top management on issues related to brand management, licensing, marketing and product evaluation. Jassin became one of the most influential and respected advisors in the fashion industries.

To learn about other cases where Andrew V. Jassin has been involved as an expert witness, order an Expert Witness Profile report.

Discussion by the Court

Jassin opined that the Consensus Report was not a fair market valuation because it was prepared for Xcel, a buyer, when “fair market valuations are created for the benefit of the seller not for the buyer.” Specifically, Jassin stated a fair market valuation would contain 14 different factors, as he defined them.

Moreover, Jassin’s report did not include any financial estimates about the value of the trademarks.

Jassin failed to review the July 6, 2018 and November 21, 2018 appraisals conducted by Consensus

Here, Jassin’s conclusion that the Consensus Report did not include a fair market valuation of the “Halston” and “H by Halston” trademarks was based, in part, on the Report’s failure to include a discussion of the 14 factors that Jassin contended were required to qualify as a fair market value report. As Comfortex pointed out, the Consensus Report explicitly referred to and incorporated prior appraisals prepared by Consensus on July 6 and November 21, 2018. It was undisputed that Jassin did not review the appraisals, both of which were produced in discovery and were available to the Defendants. 

The Defendants argued that Comfortex failed to explain why the July 6 and November 21, 2018 appraisals would affect Jassin’s methodology.

But Comfortex noted that the appraisals included a recitation of the 14 factors Jassin opined were necessary for a fair market value report. Defendants never disputed this point. In other words, Jassin did not review directly relevant parts of the record, which rendered his opinion unreliable.

Because Jassin did not review relevant parts of the record, the Court found Jassin’s expert report was based on data that was “simply inadequate to support the conclusions reached,” such that Jassin lacked good grounds for his opinion that the Consensus Report was not a fair market value report.

Jassin did not offer an opinion as to the value of the trademarks

Comfortex argued that the report should be excluded under Rule 403 because it did not offer an opinion as to the value of the trademarks, and thus had no probative force. However, because Jassin’s expert report did not meet the requirements of Rule 702, the Court need not analyze whether it should also be excluded pursuant to Rule 403.


The Court granted Comfortex’s motion to exclude Andrew Jassin’s expert report.

Key Takeaways:

Inadequate Data: When an expert opinion is based on data or a methodology that are simply inadequate to support the conclusions reached, Daubert and Rule 702 mandate the exclusion of that unreliable opinion testimony.

Case Details:

Case Caption:Comfortex Co., Ltd. v. Xcel Brands, Inc.
Docket Number:1:21cv7326
Court:United States District Court, New York Southern
Order Date: March 25, 2024


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