Contracts — damages

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United States Court of Appeals For the Seventh Circuit

Civil

Contracts — damages

Courts should not reject arms’length transactions in determining a plaintiff’s damages.

“The district court stated that plaintiffs’ approach has two flaws, each fatal: first, because Sentinel did not own 100% of Falcon, it is impossible to derive the value of the whole firm from the amount paid for its holdings; second, the amount that Sentinel was paid depended on how much Khan and Falcon could borrow rather than Falcon’s true value. Neither of these propositions is sound; indeed, each supposes that there is some measure of “true” value that differs from what a willing buyer will pay a willing seller in an arms’-length transaction. Yet that is the gold standard of valuation; other measures are approximations. The value of a thing is what people will pay. The judiciary should not reject actual transactions prices when they are available.”

Vacated and Remanded.

11-2815 Malik v. Falcon Holdings, LLC

Appeal from the United States District Court for the Northern District of Illinois, Guzmán, J., Easterbrook, J.