Written by Chris Walton, JDPlaintiff-side commercial litigators learn this failure mode the hard way. The plaintiff proves liability. The defendant’s misconduct is on the record. The expert offers a damages number based on the financial information available — which, because the defendant controlled the books, is incomplete and partially unreliable. The trial court rejects the expert wholesale and awards zero. Liability without recovery.
The Virginia Court of Appeals fixed the result on appeal in Kirdassi v. White, No. 0164-24-4 (Va. Ct. App. Mar. 25, 2025). Although the case was tried in Virginia, the entity at the center was a Delaware LLC, and the Court of Appeals applied Delaware law to the fiduciary duty claim. Under Delaware law, the trial court’s response was reversible error — and the doctrinal reason is one plaintiff-side teams should be developing in the trial record, not discovering on appeal.
Kirdassi arose from a soured medical-clinic investment. David Kirdassi invested in Laser Spine & Joint Center, LLC, a Delaware entity, alongside his business partner Mitchell Scott White, a chiropractor. The relationship deteriorated; Kirdassi alleged that White and his sons diverted business and breached fiduciary duties to the entity. The trial court found that Scott had breached his fiduciary duty of loyalty to LSJC. But on damages, it accepted no number. Kirdassi’s expert, a CPA, had estimated the value of LSJC at approximately $545,307 based on the financial information he could obtain. He acknowledged he did not have complete revenue records and could not confirm he had the full financial picture. The trial court, citing the unreliability of LSJC’s QuickBooks data, the commingling of funds across related entities, and the gaps in revenue records, concluded that it could not confidently assign a value and awarded zero damages.
The Court of Appeals reversed and remanded for the trial court to determine value and award damages.
Delaware law on damages for breach of fiduciary duty is not symmetrical between the parties. Once a breach of the duty of loyalty is established, the trial court must do two things. It must award at least nominal damages — the absence of a precise calculation does not authorize a zero recovery. And when actual damages are difficult to calculate, the court must make a reasonable estimate rather than throw up its hands. Delaware courts resolve uncertainty in the damages calculation against the wrongdoer, not the injured party. The wrongdoer should not benefit from the difficulty of measuring the harm they caused, particularly when the unreliability of the records is itself a product of their control over the books.
The trial court in Kirdassi collapsed both rules at once. It demanded precision Delaware does not require, and it placed the cost of the resulting uncertainty on the plaintiff rather than the defendant. The Court of Appeals’ choice-of-law analysis routed the fiduciary duty issue to Delaware substantive law under the internal-affairs doctrine, and Delaware’s uncertainty rule did the work on appeal.
The operational point for plaintiff-side litigators is that this rule does not apply itself. It needs to be developed in the trial record and put squarely in front of the court before the close of evidence. The breach must be proved with particularity on the duty-of-loyalty count where the rule is most forceful. The defendant’s control over the books — and the consequent difficulty of the damages calculation — should be established as factual matter on the record rather than left for argument. The expert’s estimate, with its acknowledged limitations, must read as a reasonable effort rather than guesswork. And post-trial briefing should cite the Delaware uncertainty rule by name and walk through its application. A trial court that rejects an expert wholesale on a proven duty-of-loyalty count, without engaging with the methodology or the bounded analysis, leaves the appellate court no record of having applied the correct legal standard. That is the posture Kirdassi corrected — and the posture plaintiff-side teams should foreclose at trial rather than reverse on appeal.
The doctrine creates the latitude. What an expert does with it at trial is a different problem. The mistake on this side of the table is treating the analysis as binary — sufficient information or not — when the question that actually decides the case is whether the expert’s handling of the gaps gives the trial court something to work with. An expert who hedges with caveats and then drops a single number invites the rejection Kirdassi corrected. An expert who structures the report so the gaps are visible and the estimate is bounded does not.
The structural elements of a messy-books valuation that survives judicial scrutiny share several features. The expert opens with an explicit inventory of what they had access to, what they did not, and why — pinning the gaps to specific record categories such as revenue records, intercompany transfers, or payroll allocations rather than gesturing vaguely at unreliability. The expert then identifies which valuation methodologies the available information actually supports, and explains the choice. If a market approach is unavailable because comparable transactions cannot be identified, that is stated. If an income approach is constrained because revenue cannot be reliably reconstructed, that is stated, and the assumptions used to bridge the gap are articulated.
Where ranges are appropriate, the expert presents a range with named endpoints, each tied to an explicit assumption about the gap. If the unreconciled deposits represent revenue from the disputed activity, the value is X. If they represent owner contributions, the value is Y. This converts the messy-books problem from a generalized credibility issue into a series of specific factual questions the trial court is in a position to resolve. It also gives the appellate court something concrete to point to if the trial court chooses to award nothing.
Forensic accountants working with valuation experts on these matters carry a parallel obligation. The forensic work product — the reconstruction of revenue, the tracing of intercompany flows, the identification of personal expenses, the normalization of payroll — populates the assumptions in the expert’s range. A messy-books case in which the forensic and valuation work are integrated, and in which the integration is documented in the report, is materially harder to reject wholesale than one in which the valuation expert simply notes the records were incomplete and proceeded anyway.
A working checklist for engaging litigators and testifying experts.
Most experienced valuation experts and forensic accountants working in commercial litigation already deliver written reports with explicit gaps inventories, methodology choices tied to what the record supports, and bounded ranges with named assumptions. If that describes the expert your firm already uses, you are past the failure mode Kirdassi documents. The article above is a checklist for cases where the books are unusually bad, the wrongdoing is contested, or the litigator and expert have not worked together before. It is not a pitch for outside help on every fiduciary duty matter.
Kirdassi does not announce new Delaware law. What it gives practitioners is a recent, citable illustration of a trial court awarding zero damages on a proven breach because the books were a mess — and a recent, citable correction. The defendant turned unreliable records into a zero recovery once. The plaintiff-side team that builds the trial record with the Delaware uncertainty rule already in mind, and pairs that record with an expert report structured to make the gaps the court’s specific factual questions rather than a generalized credibility problem, does not have to wait for the appellate court to do its work.
If you are litigating a fiduciary duty matter involving a Delaware entity and contending with incomplete or unreliable financial records, happy to discuss how the valuation analysis can be structured to survive the kind of wholesale rejection Kirdassi corrected on appeal.
Chris Walton, JD, is President & CEO of Eton Venture Services. He can be reached at [email protected].
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