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BP Amoco Chemical Co. v. Flint Hills Resources LLC

April 10, 2009

BP AMOCO CHEMICAL COMPANY, PLAINTIFF/COUNTER--DEFENDANT,
v.
FLINT HILLS RESOURCES LLC, DEFENDANT/COUNTER--PLAINTIFF.
FLINT HILLS RESOURCES LLC, THIRD-PARTY PLAINTIFF,
v.
BP CORPORATION NORTH AMERICA INC., DEFENDANT.



The opinion of the court was delivered by: Judge Amy J. St. Eve

Motion Ex. 20

MEMORANDUM IN SUPPORT OF DAUBERT MOTION NO. 1: FHR'S PRINCIPAL DAMAGES EXPERTS BP AMOCO CHEMICAL COMPANY AND BP CORPORATION NORTH AMERICA INC.'S MEMORANDUM IN SUPPORT OF THEIR MOTION TO EXCLUDE THE OPINIONS OF SHARON MOORE BETTIUS AND JEFFREY BALIBAN

TABLE OF CONTENTS

ARGUMENT...................................................................................................................................1

I. BETTIUS' AND BALIBAN'S OPINIONS CALCULATE AND MEASURE DAMAGES IN A MANNER CONTRARY TO THE PSA................................................1

II. BETTIUS AND BALIBAN USE IMPROPER METHODOLOGIES TO DETERMINE DAMAGES..................................................................................................3

A. Bettius And Baliban Have Failed To Calculate A Fair Market Value. ...................3

1. Bettius Has Not Calculated An "As-Represented" Value Using Her Assumptions.................................................................................................5

2. Baliban Has Calculated An Investment Value, Not A Fair Market Value............................................................................................................7

B. No Methodology Connects The Amounts Of Bettius' Changes To Capital Expenditures, Profitability, Or The Discount Rate To Any Alleged Breaches...................................................................................................................8

C. Baliban Improperly Uses FHR's Internal Rate Of Return To Discount Cash Flows...............................................................................................................9

III. BETTIUS' AND BALIBAN'S OPINIONS ARE FUNDAMENTALLY FLAWED BECAUSE THEY DO NOT FIT THE FACTS OF THIS CASE....................11

A. Significant Changes In FHR's Alleged Damages Have No Effect On Bettius' Opinion.....................................................................................................11

B. Bettius Assumes The Absence Of Any Representations And Warranties Instead Of A Partial Breach, As Alleged By FHR.................................................12

C. Baliban Incorporates Speculative Cash Flows To Increase His Alleged Damages Calculations............................................................................................12

D. Baliban Assumes Production Capacities Lower Than Those Assumed By FHR's Putative Capacity Expert............................................................................14

CONCLUSION..............................................................................................................................15

TABLE OF AUTHORITIES

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First Nat'l Bank of Elgin v. Dusold, 180 Ill. App. 3d 714, 536 N.E.2d 100 (Ill. App. Ct. 1989)................................................. 2

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