Bankruptcy Court Adopts Managing Principal John Jarosz’s Lost Profits Calculation in False Advertising/Breach of Contract Case
April 29, 2021
Analysis Group was retained to work with the cable communications company Windstream Holdings, the plaintiff in a false advertising lawsuit against a rival company, Charter Communications. When Windstream entered Chapter 11 bankruptcy to restructure, Charter launched a campaign in several of Windstream’s strongest markets intended to convince Windstream’s customers that the company would not be able to continue its service and was planning to liquidate, and that they should switch to Charter. Windstream filed suit against Charter and sought damages for a variety of injuries.
An Analysis Group team led by Vice President Shogo Hamasaki and Managers Andrea Hugill and Duo Jiang supported Managing Principal John Jarosz, who filed an expert report and testified at trial on the damages incurred by Windstream for lost profits due to the customers the company lost because of Charter’s campaign. Taking into account the difference in the company’s “churn rate” (the percentage of customers who discontinue service) for the relevant period versus the earlier period, the revenue associated with those lost customers, and the profit margin associated with that revenue, Mr. Jarosz calculated that Windstream’s damages were between $3.2 and $5.1 million.
A judge in the US Bankruptcy Court for the Southern District of New York found in Windstream’s favor. Calling Mr. Jarosz “well credentialed” and “a credible expert witness,” the judge awarded Windstream $5.1 million, the maximum amount Mr. Jarosz had recommended.