Testifying as an Alcohol Industry Expert Federal Bankruptcy Court

Since September 2017, my practice has focused on the alcohol industry – first as the regulator at TABC, and now as private counsel getting businesses open and operating legally and successfully. So when I was asked to testify as an expert witness in federal bankruptcy court about the tail end of a business’s life cycle, I jumped at the chance. The case involved the valuation of a distressed alcohol manufacturer. The valuation issue hinged on whether the manufacturer’s existing inventory could be factored into the equation after its TABC permit had lapsed. Want the crib-notes answer? Yes, under the right circumstances, the alcohol inventory can still be sold.

I spent years prepping expert witnesses.

But my post isn’t about the technical legal analysis I testified to. Instead, I’ll share how I tailored my role as an expert witness based on my prior work experience. Before pivoting to government service when I joined the Health and Human Services Commission in 2015, I cut my teeth as an associate at a Houston trial firm where I learned the fundamentals of trial work. Clear writing, persuasive issue framing, and relevant here, expert witness prep. 

Witness reports and testimony were a staple in every litigation matter regardless of the practice area. I can remember long hours prepping experts mid trial, often late into the night before taking the stand. Mock cross examination was always fun:

• So you want the jury to trust your opinion on legal malpractice, even though you’ve been sued for legal malpractice in the past?
• You’ve never stepped foot in the factory where the accident occurred yet you expect the court to accept you as an expert on its operations?
• [And my personal favorite] How much is Corporate Defendant Inc. paying you to copy and paste your standard report with a new name at the top? 

These days, I’m the one testifying as an expert.

My expert witness prep experience from a decade ago prepared me for actually testifying as an expert. At the witness stand, the value I added to my client’s case came from my experience as TABC general counsel. Knowing the Code and the rules backwards and forwards was essential, of course. But more importantly, I understand how the regulator thinks and acts. Testifying to TABC’s executive decision-making processes completes the analysis that begins with explaining the Code and rules. I was able to testify about how those decisionmakers would arrive at their decision, and predict with confidence that my client’s position was correct – the business’s remaining inventory could be sold in bankruptcy and monetized in the valuation analysis.

To provide context for my background and qualifications as an expert, I made my elevator pitch to the judge. To paraphrase:

About a dozen attorneys in Texas truly understand the Alcoholic Beverage Code and TABC’s administrative rules. Half of them work at TABC. The other half are my worthy competitors, but none served as the agency’s general counsel, oversaw its legal staff, or advised agency decisionmakers directly.

The judge laughed, a risk that landed. More importantly, the testimony set the tone as an unflappable expert on alcohol law and how it’s enforced. My experience as a litigator gave me confidence to testify. My experience as the former TABC general counsel gave me the credibility to convince the Court that I know how the regulatory sausage gets made.

The outcome? My client’s case persuaded the judge that the business’s value was several hundred thousand dollars higher than the other side’s position. Other business facts lined up in our favor so I can’t take all the credit. But persuading the Court that the business’s remaining inventory could be monetized as a sale asset played a role.

If you need expert testimony on TABC decision-making, I can help.

So here’s my shameless plug. If your business or your client is in litigation – bankruptcy or otherwise – and needs help with the Code and its rules, I can assist. Hit me up. I’m always open to serving as an expert witness, particularly in bankruptcies, M&A deals, or valuation disputes. I can bridge the gap between regulatory nuance and business reality, and do so with confidence and credibility.