Case Studies
J.S. Held Acquires Shechter & Everett to Expand Forensic Accounting Capabilities for Family Law Disputes in Florida
Read MoreIn Spring 2025, the Insured in this scenario transported a shipment of finished goods inventory from their distribution center in California to a facility in the Southeast United States. Upon arrival, an entire trailer containing the goods was reported stolen. The theft occurred before the inventory was offloaded or processed at the destination.
We were instructed approximately three months after the theft occurred. Due to the Insured’s request for an expedited resolution, we operated under significant time pressure. To facilitate a swift and thorough review, we held multiple meetings with the Insured’s accounting team. These sessions focused on gathering documentation, clarifying the claim methodology, and updating the loss measurement. Our proactive discussions with the Insured contributed to accelerating the review process, and an amicable settlement was reached between the parties within a few weeks of our involvement commencing.
The claim was based on the stolen finished goods valued at the manufacturer’s suggested retail price (MSRP), which is the Insured’s gross retail price before any discounts. While MSRP was used in the claim, we understood that over 90% of the Insured’s sales are made with discounts and, hence, discounts routinely apply.
Having confirmed the lost volume of inventory via reference to the associated shipping documentation, we turned our attention to the associated values. We confirmed the MSRPs via reference to the Insured’s sales and accounting records and undertook high-level reasonableness checks to publicly available data sources, such as online retail stores.
In addition to valuing the lost inventory at MSRP, we also worked in collaboration with the Insured to identify the value of the lost inventory based on the most probable selling prices that would have been achieved had the loss not occurred. This process involved extensive discussions with members of the Insured’s senior accounting team and confirming issues such as the most likely sales channel that the products would have followed, the discounting profile most likely to have been adopted, and the likely level of customer returns.
We then identified and quantified the selling expenses that were avoided as a result of no sales occurring, which included fulfilment labor, packaging, and freight costs.
Following discussions between the Insured, Brokers, and Insurers it was agreed that the loss should be valued at the most probable selling prices, which were substantially lower than the full MSRP prices, and an amicable resolution was promptly reached by the parties.
Lumi Ishikawa
Senior Vice President
Forensic Accounting Practice
+44 20 4574 5262
[email protected]
> Inventory / Stock Losses
Our team provides financial expertise to assess the precise volume and value of inventory or stock that is lost or damaged as a result of adverse incidents such as fraud, arson, theft, or natural disasters.
> Forensic Accounting
Our Forensic Accounting Practice includes Certified Public Accountants, Certified Fraud Examiners, Certified Financial Forensics experts, and other financial experts who specialize in financial investigations, dispute resolution, and regulatory compliance.