Table of Contents

Introduction

PART I. Latest Insights

Chapter 1. Special Report: The Impact of COVID-19 on Restructuring, Insolvency and Impairment

Chapter 2. What the New Subchapter V in Bankruptcy Means to Business Valuers

Chapter 3. Tips on Handling 10 Key Issues in Bankruptcy Valuations

Chapter 4. Choose Your Client Wisely in a Bankruptcy Engagement

Chapter 5. The Use of Financial Projections in Solvency Opinions

PART II. Court Case Digests

Court Case Summary Table

Court Case Digests

Adelphia Recovery Trust v. FPL Group, Inc. (In re Adelphia Corp.)

In re Aerogroup International, Inc.

Alberts v. HCA, Inc.

In re Alta+Cast LLC

American Classic Voyages Co. v. JP Morgan Chase Bank (I)

American Classic Voyages Co. v. JP Morgan Chase Bank (II)

In re American Home Mortgage Holdings, Inc. (I)

In re American Home Mortgage Holdings, Inc. (II)

In re American Homepatient, Inc.

In re: American Suzuki Motor Corporation

Antioch Co. Litig. Trust v. Morgan

Ardmor Vending v. Kim

ASARCO v. Americas Mining Corp. (I)

ASARCO v. Americas Mining Corp. (II)

In re Bachrach Clothing, Inc.

Bakst v. United States of America (In re: Kane & Kane)

Bank of America, N.A. v. Veluchamy (In re Veluchamy)

In re Bartomeli

In re Body Transit

In re Boston Generating

Boyer v. Crown Stock Distribution, Inc.

In re Breitburn Energy Partners LP

Burtch v. Opus, LLC (In re Opus East, LLC) (I)

Burtch v. Opus, LLC (In re Opus East, LLC) (II)

In re Capmark Financial Group

In re Case No. 800 Bourbon St.

In re Certified HR Service Co. (II)

Charles J. Lisle, Trustee v. John Wiley & Sons, Inc.

In re Chemtura Corp. (I)

In re Chemtura Corp. (II)

In re Chrysler LLC

In re Civic Partners Sioux City, LLC

In re Cole

In re Colonial Realty Company; Hirsch v. Steinberg (II)

In re Coram Healthcare Corp.

Crane v. Morris (In re Morris)

In re Dawes

In re DBSD North America, Inc.

Dietz v. Jacobs

DMC Investment Corporation v. Pincrest Investment Co., et al.

Doctors Hospital of Hyde Park, Inc. v. Desnick et al.

In re Eastman Kodak Company

EBC I, Inc. v. America Online, Inc.

In re EM Lodgings, LLC

In re Emerge Energy Services LP

In re Fairvue Club Properties

In re Frezzo

In re Genco Shipping & Trading Ltd.

In re Global Technovations, Inc. (I)

In re Global Technovations, Inc. (II)

In re Global Technovations, Inc. (III)

In re Glueck

In re Greater Southeast Community Hospital Corp. (I)

In re Greater Southeast Community Hospital Corp. (II)

In re Greater Southeast Community Hospital Corp. (III)

H.G. Roebuck & Son, Inc. v. Alter Communications

Hanckel v. Campbell (In re Hanckel)

In re Harper

Healthco International v. Hicks, Muse & Co.

In re Hechinger Investment Company of Delaware, Inc.

In re Hechinger Investment Company of Delaware

Heilig Meyers Co. v. Internal Revenue Service

Holber v. M&T Bank (In re Scheffler)

In re Horsehead Holding Corp.

In re Houston Drywall, Inc.

In re Jonatzke

Joseph D. Olsen, Trustee of Huntley Ready Mix, Inc. v. Gary A. Floit

In re Joy Recovery Tech. Corp.; Daley v. Chang

In re Jumer’s Castle Lodge, Inc.

Kool, Mann, Coffee & Co., et al. v. L. Coleman Coffey, et al.

LaSalle National Bank Association v. Paloian

In re Lason, Inc.

In re Lehman Bros. Holdings Inc.

In re: LightSquared Inc.

In Re: LMR, LLC

In re Louis Frey Company, Inc.

In re Magna Cum Latte, Inc.

McDuffie v. O’Neal

In re Med Diversified, Inc. (I)

In re Med Diversified, Inc. (II)

In re Mercury Companies, Inc. (I)

In re Mercury Companies, Inc. (II)

Miller Bros. Coal v. Consol of Kentucky, Inc.

Monsanto Co. v. Roeder

Monticello Arcade v. Lyall

Mungo v. Taylor

In re Nanovation Technologies, Inc

In re Nellson Nutraceutical (I)

In re Nellson Nutraceutical (II)

Nelson v. Walnut Investment Partners

Nesser v. Boston Restaurants

Official Committee of Unsecured Creditors v. Calpers Corp. Partners, LLC

In re Oglesby

In re Oneida Ltd.

Paloian v. LaSalle Bank

In re Parnes

Peltz v. Hatten

Pension Benefits Guaranty Corp. v. CF&I Fabricators (In re: CF&I Fabricators)

Pereira v. Dow Chem. Co. (In re Trace Int’l Holdings, Inc.)

Post-Confirmation Communication for Small Loans, Inc. v. Martin

In re Premier Entertainment Biloxi LLC

In re Prince

Pryor v. Tiffen (In re TC Liquidations LLC)

In re PWS Holding Corporation

r2 Advisors, LLC v. Equitable Oil Purchasing Co. (In re Red Eagle Oil, Inc.)

Redmond v. NCMIC Fin. Corp. (In re Brooke Corp.)

In re Residential Capital, LLC

Lippe v. Bairnco Corp. (I)

Lippe v. Bairnco Corp. (II)

Lippe v. Bairnco Corp. (III)

In re Robert E. Mahoney, Jr. Debtor

Samson v. Western Capital Partners LLC (In re Blixseth)

In re South Canaan Cellular Investments

In re Spansion

In re Spielfogel

Stadtmueller v. Fitzgerald (In re Epic Cycle Interactive, Inc.)

In re Sunedison, Inc.

Superior Offshore International, Inc. v. Schaefer

In the Matter of TCI 2 Holdings, LLC

In re Terrestar Networks, Inc.

In re Thomas, Debtors

Tidwell v. Leskosky

In re TOUSA, Inc.

Trans World Airlines, debtor v. Trans World Airlines Official Committee of Unsecured Creditors

In re Tribune Co.

In re Tronox Incorporated

U.S. Bank N.A. v. Verizon Communications Inc.

United Airlines, Inc. v. Regional Airports Improvement Corp.

Valley Vulcan Mold v. AMPCO

In re Valley-Vulcan Mold Co., Debtor

VFB LLC v. Campbell Soup Co. (II)

In re Village at Camp Bowie I, L.P.

Villaje del Rio, Ltd. v. Colina del Rio, L.P.

Vision-Park Properties v. Seaside Engineering

Waller v. Pidgeon

In re Washington Mutual, Inc.

Weinman v. Crowley (In re Blair)

Weisfelner v. Blavatnik (In re Lyondell Chem. Co.)

In re Westpointe, L.P. (II)

In re White

Whyte v. C/R Energy Coinvestment II, L.P. (In re SemCrud)

In re Winstar Communication, Inc.

In re Yellowstone Mountain Club, LLC

In re Young Broadcasting, Inc.

Look Inside the Compendium >>

• Adelphia Recovery Trust v. FPL Group, Inc. (In re Adelphia Corp.)
  Court finds trust failed to prove insolvency; its expert’s use of DCF alone was inappropriate where there were no cash flow projections untainted by fraud, but competing expert’s market-based approach and value per subscriber analysis were solid.
• Alberts v. HCA, Inc.
  District court affirms bankruptcy court’s valuation of hospital under income approach and finds its treating a $20.6 million capital transfer as surplus rather than a necessary asset for operations is not double counting and is reasonable under the facts ...
• American Classic Voyages Co. v. JP Morgan Chase Bank (In re American Classic Voyages Co.) (I)
  Insolvency valuation relies on credibility of pre-9/11 projections and also credibility of experts.
• American Classic Voyages Co. v. JP Morgan Chase Bank (In re American Classic Voyages Co.) (II)
  Are bankruptcy courts ‘required’ to reject a DCF analysis when market cap data is available?
• Antioch Co. Litig. Trust v. Morgan
  Court excludes lost value opinion from expert who was versed in business valuation, but unfamiliar with scientific damages methodologies and did not test reliability of sources providing data points for damages calculations.
• Ardmor Vending v. Kim
  At issue is the method of valuation of appellants' collateral, given their security interests in both the equipment and the lease of the Kims' dry cleaning business.
• ASARCO v. Americas Mining Corp. (I)
  Fraudulent transfer claims in bankruptcy turn on multi-million dollar valuation of controlling interest in foreign mining company.
• ASARCO v. Americas Mining Corp. (II)
  Federal district court considers whether control premium can be an element of damages in fraudulent transfer/breach of fiduciary duties in bankruptcy case.
• Bakst v. United States of America (In re: Kane & Kane)
  In fraudulent conveyance suit, bankruptcy court admits expert’s testimony on reasonable compensation as it relates to reasonably equivalent value for the debtor law firm’s payment of its partners’ income taxes, but strikes insolvency expert’s opinion for ...
• Bank of America, N.A. v. Veluchamy (In re Veluchamy)
  In a fraudulent transfer case involving S corp, court says valuation should reflect that buyers of S corps would experience a reduction in the value of the corporations' earnings because of the need to pay personal income taxes on those earnings.
• Boyer v. Crown Stock Distribution, Inc.
  Bankruptcy court voids $6 million paid for company as a fraudulent transfer, when valuation evidence shows it was worth no more than $4 million as a going concern at time of sale.
• Burtch v. Opus, LLC (In re Opus East, LLC) (I)
  In Chapter 7 case, Bankruptcy Court finds trustee expert’s liquidation valuation fails to meet insolvency tests; court says expert’s substantial discounting of debtor’s assets is based on mistaken assumption and incompatible with going-concern valuation.
• Burtch v. Opus, LLC (In re Opus East, LLC) (II)
  In Chapter 7 case, district court upholds Bankruptcy Court’s insolvency determination, which was a predicate to many of trustee’s claims; reviewing court says evidence supports use of going-concern valuation and rejection of liquidation discount.
• Charles J. Lisle, Trustee v. John Wiley & Sons, Inc.
  The U.S. Court of Appeals for the Sixth Circuit found that a debtor’s payment followed by a corresponding dollar-for-dollar reduction in a debt owed by a company he controlled could not be recovered as a fraudulent transfer.
• Crane v. Morris (In re Morris)
  The issue before the court is whether David Keith Morris ("Debtor" or "Morris") should be granted a discharge in his underlying bankruptcy case.
• Daubert v. Merrell Dow Pharmaceuticals, Inc.
  Landmark decision by the U.S. Supreme Court, which ended by promulgating a new “gatekeeping” function for federal judges and developing an evidentiary standard now known by a single name: Daubert.
• Dietz v. Jacobs
  Court finds solvency analysis is not subject to AICPA’s valuation standards and admits expert’s claim that “magnitude of excess” reflected in adjusted balance sheet numbers means assets exceeded liabilities.
• DMC Investment Corporation v. Pinecrest Investment Co., et al.
  The Utah Supreme Court valued a 50% interest in a joint venture, holding a shopping mall, held by a limited partnership.
• Doctors Hospital of Hyde Park, Inc. v. Desnick et al.
  This adversary case relates to the Chapter 11 bankruptcy case filed by Chapter 11 Trustee for Debtor Doctors Hospital of Hyde Park Inc. (“Doctors Hospital” or “Trustee”). The Adversary Complaint pleaded a total of 28 counts (“Complaint”).
• EBC I, Inc. v. America Online, Inc.
  How to prove solvency when internet company’s assets ‘disappear overnight ...
• H.G. Roebuck & Son, Inc. v. Alter Communications
  Federal district court reverses bankruptcy court’s confirmation of debtor’s exclusive reorganization plan, finding that expert valuation does not satisfy requirement for actual market valuation under new value exception to absolute priority rule.
• Hanckel v. Campbell (In re Hanckel)
  Court finds debtor’s fraudulently conveyed interest represents a dissociated interest that is held by the estate; appropriate valuation date is date of trial, and DCF analysis, as modified by court, best captures value of the interest at that time.
• Healthco International v. Hicks, Muse & Co.
  At issue are the fiduciary obligations of directors and controlling shareholders, breach of contract, negligence, gross negligence and bad faith.
• Heilig Meyers Co. v. Internal Revenue Service
  Taxpayer’s fair market valuation of account receivables must "clearly reflect income" under accounting requirements of IRC §446(b).
• Holber v. M&T Bank (In re Scheffler)
  In fraudulent conveyance suit, federal bankruptcy court rejects cost approach and “hypothetical capitalization of income approach” to value a unique technology that nevertheless never made any profit in the history of the debtor’s business.
• In re Aerogroup International, Inc.
  Bankruptcy court performs allocation analysis to divide proceeds from section 363 asset sale between two competing lenders, finding debtor’s intellectual property is most valuable asset; court notes that, at time of sale, debtor was neither healthy going concern nor subject of forced liquidation.
• In re Alta+Cast LLC
  At issue was the valuation of debtor's software corporation in Chapter 11 banckruptcy.
• In re American Home Mortgage Holdings, Inc. (I)
  Bankruptcy court approves DCF valuation of troubled loan portfolio as “commercially reasonable determinant of value” under Sec. 562 of the Code, concerning repurchase agreements.
• In re American Home Mortgage Holdings, Inc. (II)
  In issue of first impression, Third Circuit confirms that the term “commercially reasonable determinant of value” as used in Sec. 562 of the Bankruptcy Code includes the discounted cash flow methodology, particularly when markets are dysfunctional.
• In re American Homepatient, Inc.
  American HomePatient Inc. (AHP) entered into a credit agreement with certain of its secured lenders that included a warrant agreement that called for AHP to issue two series of warrants.
• In re Bachrach Clothing, Inc.
  Bankruptcy court disapproves of DCF method as lending itself to manipulation, noting rivaling experts’ “strikingly” divergent valuations despite reliance on basically the same data and analysis.
• In re Bartomeli
  Debtor's intent to deceive not established because creditor was aware of a separate judgement prior to issuing bonds to debtor. Market value compared to book value.
• In re Body Transit
  Court finds creditor’s interest in debtor’s property is “inconsequential” and says a valuation of debtor’s fitness club must account for dismal state of fitness industry due to COVID-19 shutdown; debtor’s projections related to reorganization plan are too optimistic given economic uncertainty.
• In re Boston Generating
  Court authorizes $1.1 billion asset sale of the debtors, despite DCF by lenders’ expert that shows $13.8 billion value.
• In re Breitburn Energy Partners LP
  Court finds debtor is hopelessly insolvent; court values two types of oil and gas assets under NAV and precedent transaction analyses, respectively, finding, in terms of NAV analysis, debtor’s expert is more credible on issues of pricing, forecasting, risking, and predicting costs.
• In re Capmark Financial Group
  Bankruptcy court confirms reorganization plan based in large part on “put option” approach to valuing corporate insider guaranties.
• In re Case No. 800 Bourbon St.
  Bankruptcy Court rejects proposition that sales price increase has to be attributed to one debtor’s business, as goodwill, because other debtor’s real property allegedly remains constant in value; court denies request to change allocation of proceeds.
• In re Certified HR Service Co. (II)
  Federal district court affirms bankruptcy court’s avoidance of the debtor’s $17.5 million purchase of failing company, based in large part on evidence by trustee’s expert that the debtor was insolvent at the time and the target company was worthless.
• In re Chemtura Corp. (I)
  Bankruptcy court finds total enterprise value for large specialty chemical company based on DCF as well as comparable companies and transactions analysis.
• In re Chemtura Corp. (II)
  Bankruptcy court finds that the discount rate related to a contract damages claim should incorporate the risk factors present at the time of contract execution, making risk-free rate inappropriate.
• In re Chrysler LLC
  Bankruptcy court authorized a preplan of reorganization sale of substantially all of the debtors’ assets based on evidence of fair value in exchange.
• In re Civic Partners Sioux City, LLC
  The Bankruptcy Court finds the debtor’s reorganization plan is not feasible because it fails to provide enough funds to pay in full the primary creditor’s secured claim; the plan rested on an improperly low valuation of the property that makes up the majo ...
• In re Cole
  Bankruptcy Court says differing standard of value in divorce and bankruptcy proceedings precludes use of divorce valuation of husband’s interest in dental practice; but valuation based on shareholder agreement accords with Chapter 7 liquidation analysis.
• In re Colonial Realty Company; Hirsch v. Steinberg (II)
  The issue was whether the transfer of stock of Danbury Surgical Center Inc. (DSC) and Bridgeport Surgical Center Inc. (BSC) by debtors Jonathan Googel and Benjamin Sisti to the defendants Gerald Steinberg and Robert Simons were fraudulent transfers under Bankruptcy Code § 548(a).
• In re Coram Healthcare Corp.
  The relevant valuation issue in this bankruptcy matter, in which the court confirmed the trustee’s modified plan, was the value of Coram Healthcare Corp. and Coram Inc. (the “Debtors”).
• In re CSC Industries, Inc. (Pension Benefit Guaranty Corporation v. Kathryn A. Belfance, Trustee)
  The Sixth Circuit affirmed the bankruptcy court's use of the prudent investor rate in calculating the present value of an unfunded pension liability claim.
• In re Dak Industries, Incorporated: Edward M. Wolkowitz v. American Research Corporation, et al.
  The U.S. Court of Appeals for the Ninth Circuit affirmed the lower court's solvency determination. It found that the company operating as a Debtor-in-Possession for two years after filing Chapter 11. It additionally affirmed the lower court's valuation ...
• In re Dale A. Baker, Debtor
  The Bankruptcy Court for the Northern District of Indiana declined to confirm a debtor-dentist's chapter 13 reorganization plan because the plan valued his practice at its liquidation value. Under the plan, the debtor would retain the practice and use its ...
• In re Davis: Sandra Davis v. Thomas Cullen Davis
  The U.S. Court of Appeals for the Fifth Circuit reversed the district and bankruptcy courts, ruling that a debtor's home, exempted from the bankruptcy under the state homestead excemption, may be turned over to satisfy an ex-spouse's non-dischargeable pre ...
• In re Dawes
  At issue is the valuation of the equity holder's interest in the debtor's company.
• In re DBSD North America, Inc.
  Bankruptcy court rejects DCF analysis in valuation of early-stage mobile satellite systems provider, preferring comparable company analysis provided the debtors’ expert.
• In re Eastman Kodak Company
  Bankruptcy court denies shareholders’ renewed request for an equity committee, finding neither the debtor nor its creditors are hiding value in their calculation of the total equity value of less than $500 million; expert testimony as to the allegedly und ...
• In re Edgewater Medical Center
  Bankruptcy court considers whether pervasive Medicare fraud, actual but undetected at valuation date, affects solvency.
• In re EM Lodgings, LLC
  In granting creditor’s stay relief motion, court averages competing expert valuations and finds debtor has no equity in contested hotel; court says value gap is result of experts’ legitimate disagreements over hotel’s future performance as reflected in inputs for DCF-based analyses.
• In re Emerge Energy Services LP
  Ruling on plan confirmation, Bankruptcy Court finds debtor expert’s determination of total enterprise value of reorganized debtor more credible than unsecured creditors’ expert; in adopting debtor expert’s comparable company analysis, court calls choice of comparables set a “key value driver.”
• In re Fairvue Club Properties
  Lender uses cash flow projections by the debtors’ appraiser to show that the proposed reorganization plan for two golf clubs is unfair and not feasible.
• In re Flashcom, Inc.
  District court says trustee expert’s failure to value the debtor company as a going concern meant the trustee did not prove insolvency; and, the expert improperly relied on GAAP in assessing assets and liabilities, which though relevant, are not controlli ...
• In re Frezzo
  At issue is the fair value of the Debtor's fifty percent (50%) shareholder interest in a corporate mushroom composting business known as Frezzo Brothers, Inc.
• In re Genco Shipping & Trading Ltd.
  In fight over plan confirmation, court finds nature of industry supports debtors’ reliance on net asset value approach to value Chapter 11 dry bulk shipper but not to the exclusion of more traditional methods; however, court rejects use of DCF.
• In re Global Technovations, Inc. (I)
  Bankruptcy court voids $25 million acquisition based on valuations that used historic, 12 months' earnings prior to closing and rejecting expert who relied substantially on inflated, unreasonable management projections.
• In re Global Technovations, Inc. (II)
  Federal district court affirms bankruptcy court’s solvency and “reasonably equivalent value” analysis based on more credible, substantive evidence from debtor’s expert.
• In re Global Technovations, Inc. (III)
  Sixth Circuit finds expert’s examination of post-hoc transaction in using market approach did not involve improper hindsight.
• In re Glueck
  The key issue in this case is setting the appropriate interest rate to establish present value in a "cram down" situation under 11 U.S.C. 1325(a)(5)(B).
• In re Greater Southeast Community Hospital Corp. (I)
  BV expert challenged under Daubert for reliance on third-party appraisals.
• In re Greater Southeast Community Hospital Corp. (II)
  Bankruptcy Court conducts extensive valuation findings of hospital in fraudulent transfer case.
• In re Greater Southeast Community Hospital Corp. (III)
  In fraudulent conveyance action, court admits errors in its own discounted cash flow valuation of hospital, but denies motion to reconsider, finding the trustee has the burden to present competent expert evidence regarding reasonably equivalent value.
• In re Harper
  The valuation of a minority interest in a closely held family corporation was in question in this bankruptcy case.
• In re Hechinger Investment Company of Delaware
  In June 1999, Hechinger Co. and its affiliates (Hechinger) filed for bankruptcy protection under Chapter 11 of the Bankruptcy Code.
• In re Hechinger Investment Company of Delaware, Inc.
  Claim for equitable lien denied on the basis that the creditor (Chase) negotiated a loan in good faith without knowledge of the negative pledge against the company (Builder's Square).
• In re Horsehead Holding Corp.
  In a rare nod to shareholder concerns, Bankruptcy Court approves formation of equity committee based on “dramatic adjustment in valuation” and inconsistent management positions as to financial health of debtors pre-Chapter 11 and post-petition filing.
• In re Houston Drywall, Inc.
  Bankruptcy expert goes “above and beyond” insolvency test to value major asset (municipal reimbursement/receivables) of troubled land development company.
• In re John Joseph Edwards
  At issue is breach of fiduciary duty by the trustee in regards to the sale price.
• In re Jonatzke
  Bankruptcy court substantially reduces plaintiff’s damages claim based largely on expert’s failure to independently verify assumptions regarding defendant’s alleged theft of trade secrets on lost profits and lost sales.
• In re Joy Recovery Tech. Corp.; Daley v. Chang
  This was an adversary proceeding related to the Chapter 11 bankruptcy of Joy Recovery Technology Corp.
• In re Jumer's Castle Lodge, Inc.
  One of the issues in this Chapter 11 bankruptcy case was whether James Jumer, as principal stockholder of the debtor corporation, Jumer's Castle Lodge (JCL), had caused JCL to fraudulently transfer assets.
• In re Lason, Inc.
  At issue in this case is whether or not the asset in question can be valued as a going concern at fair market value.
• In re Lehman Bros. Holdings Inc.
  Bankruptcy court denies Lehman Brother’s motion to reconsider billion-dollar distressed sale of brokerage assets during financial meltdown of September 2008, based in part on expert evidence that showed Barclays did not receive a $13 billion “windfall.”
• In re Louis Frey Company, Inc.
  Court confirms comprehensive, credible valuation of customer relationships in bankruptcy case.
• In re Magna Cum Latte, Inc.
  Bankruptcy court examines forecasts of future performance, discount rates in determination of lost profits.
• In re Mary Beth Usery (Ewing B. Gourley v. Mary Beth Usery)
  The Eighth Circuit reversed a bankruptcy court's calculation of perception damages for fraudulent dale of a business. It found that the Gourleys were entitled to rescission or benefit of the bargain damages, which were measured by the amount they paid le ...
• In Re McCook Metals v. Lynch
  The valuation issue in this bankruptcy case focused on the value of a limited liability company.
• In re Med Diversified, Inc. (I)
  In a case of first impression in a bankruptcy adversary proceeding, the narrow issue was whether Scott P. Peltz, the proposed business valuation expert witness for Addus Healthcare Inc. (Addus), was qualified.
• In re Med Diversified, Inc. (II)
  Bankruptcy court excludes expert business valuation report for “pervasive bias,” but also reveals possible bias against BV profession as a whole.
• In re Mercury Companies, Inc. (I)
  For reasonably equivalent value determination, Bankruptcy Court finds contract price and values from experts’ discounted cash flow analyses are too limiting and applies totality of circumstances test, concluding stock transfer is not avoidable.
• In re Mercury Companies, Inc. (II)
  On remand, Bankruptcy Court determines sale of plaintiff’s subsidiaries to defendants yielded “reasonably equivalent value” when viewed from objective creditor’s perspective, under FMV standard and without considering debtor’s subjective needs or beliefs.
• In re Nanovation Technologies, Inc
  Bankruptcy Court discredits trustee’s valuation assumptions (growth rates, pricing multiple) as inconsistent and “seriously misguided” attempt to go after debtor’s valuation advisors.
• In re Nellson Nutraceutical (I)
  Bankruptcy court precludes valuation report (under Daubert) for use of “maverick” DCF analysis.
• In re Nellson Nutraceutical (II)
  Management deliberately manipulates projections, without experts’ knowledge; court determines enterprise value nonetheless, adjusting and weighting reports.
• In re Oglesby
  The common issue in these two cases is setting appropriate interest rates to establish present value in "cram down" situations.
• In re Oneida Ltd.
  In reorganization confirmation, Bankruptcy Court rejects DCF analysis for cost of debt based on comparable companies rather than actual exit facility.
• In re Parnes
  At issue is the valuation of debtor's dental practice.
• In re Pegasus Agency, Inc., Debtor
  The U.S Court of Appeals for the Second Circuit reviewed a district court's order to reinstate the automatic stay in a Chapter 11 bankruptcy proceeding. The court found that the debtor's reorganization plan did not have a reasonable possibility of succes ...
• In re PieceGoods Shops Co.
  At issue was the reasonableness of the equity value determined and whether it met the “best interests” test.
• In re Premier Entertainment Biloxi LLC
  Bankruptcy court rejects “equitable solvency test” for gaming resort debtors, finding that adjusted balance sheet test, as supported by expert evidence, was the preferred test.
• In re Prince
  At issue is the equity value of Dr. Prince's stock in his orthodontics corporation.
• In re PWS Holding Corporation
  The 3rd Circuit affirmed an examiner's determination that debtors should be released from any fraudulent transfer claims arising from a leveraged recapitalization occurring two years before the bankruptcy.
• In re Residential Capital, LLC
  Ruling on the adequate protection claim of junior secured noteholders (JSNs) in a complex bankruptcy proceeding, court finds JSNs failed to prove a diminution in the value of their cash collateral during case; flawed assumptions and inputs invalidate the ...
• In re Resorts International
  At issue are the appraisal rights of the shareholder after a merger.
• In re Robert E. Mahoney, Jr. Debtor
  At issue is the fair market value of 4,500 shares of Quality Systems Associates Inc.
• In re South Canaan Cellular Investments
  Court denies debtors’ request for “appraisal protocol” concerning its purchase of certain limited partnership interests, including a demand that the independent appraiser be kept from learning about the parties’ prior competing valuations.
• In re Spansion
  Bankruptcy court finds billion-dollar total enterprise valuation of flash memory manufacturer supports finding that proposed reorganization plan is fair, but declines confirmation pending amendments to equity incentives for management.
• In re Spielfogel
  At issue is the valuation of Bambu, which imports and distributes cigarette rolling paper throughout the world.
• In Re Stephen L. Vecchitto
  At issue is the valuation of 220 shares of stock of a closely-held corporation.
• In re Stephen L. Vecchitto ( Martin W. Hoffman, trustee v. Stephen L. Vecchitto)
  The Second Circuit affirmed the lower courts' valuation of the debtor's stock in his accounting practice. It declined to value the practice under the debtor's buy-sell agreement because the trustee did not assume the contract nor had any of the triggerin ...
• In re Structurlite Plastics Corporation: SPC Corporation, et al. v. Robert E. Griffith, et al.
  The U.S. Court of Appeals for the Sixth Circuit reversed the bankruptcy court's grant of summary judgment in favor of the creditor's regarding the solvency of the company just after the LBO transaction. The court noted that the purchase price is highly p ...
• In re Sunedison, Inc.
  Court says debtors “appear to be hopelessly insolvent” and rejects shareholders’ call for equity committee; debtors’ prepetition published financials are not “dependable evidence” of assets’ fair market value, even if investors relied on balance sheets.
• In re Susan E. Wick, Debtor: John E. Stoeber v. Susan E. Wick, et al.
  The U.S. Court of Appeals for the Eighth Circuit affirmed the bankruptcy court’s decision that the bankruptcy estate was entitled to share in the proceeds of the option to the extent the option was earned prior to the bankruptcy filing. Further, it limite ...
• In re Terrestar Networks, Inc.
  Bankruptcy court holds that a security interest may exist in the economic value of an FCC license, despite federal law precluding the granting of a collateral interest in the license itself.
• In re Texans CUSO Insurance Group
  Court confirms expert lost profit damages of $21.1 million based on careful calculation of earnout payments under breached sale and employment agreement.
• In re The Minnelusa Co.
  176 B.R. 954 (Bankr. M.D. Fla. Sept. 29, 1994). Judge Paskay.
• In re Thomas, Debtors
  At issue is the value of a secured claim held by the Internal Revenue Service ("IRS") in the Debtors' stock in a closely held corporation.
• In re TOUSA, Inc.
  Bankruptcy court voids over $600 million in transfers to subsidiaries of bankrupt homebuilders based on teams of expert testimony regarding solvency opinions and lack of reasonably equivalent value.
• In re Tribune Co.
  Bankruptcy court declines to confirm competing reorganization plans for billion dollar publishing conglomerate, in part based on flawed valuations from both parties.
• In re Tronox Incorporated
  Bankruptcy Court discredits defendant experts’ “self-contained,” market-oriented solvency analysis finding his DCF analysis relied on inflated, “sell-side” company projections and his comparable analyses used insufficiently similar companies and transacti ...
• In re UDC Homes
  At issue is the approval of compensation and reimbursement of expenses.
• In re Valley-Vulcan Mold Co., Debtor
  At issue is whether the bankruptcy court erred in admitting expert testimony on matters of valuation.
• In re Village at Camp Bowie I, L.P.
  Bankruptcy court finds “cramdown” interest rate equals at least 6.4%, based on current commercial lending “realities” as well as expert’s application of debtor-specific risk factors, including benefits of bankruptcy and single lender.
• In re Washington Mutual, Inc.
  Federal bankruptcy court criticizes debtors’ valuation of its proposed reorganization for being too low and plan objectors value for being too high, ultimately crediting the debtors’ more “complete” valuation, with adjustments.
• In re Westpointe, L.P.
  The bankruptcy court adopted a reorganization plan over the debtors' objection.
• In re White
  Court discredits expert valuation in shareholder buyout case based on flawed income approach and inconsistent testimony.
• In re Winstar Communication, Inc.
  Analyst argues that Bankruptcy Court should disregard publicly-traded stock value to assess whether telecom company was insolvent eighteen months before bankruptcy filing.
• In re Yellowstone Mountain Club, LLC
  Bankruptcy court avoids $209 million loan distribution to a resort owner, finding he (and counsel) manipulated the valuation experts, inflated projections, and used flawed appraisals for the underlying assets.
• In re Young Broadcasting, Inc.
  Bankruptcy court rejects expert’s “levered DCF” approach under Daubert, finding it untested, unreliable, and unused in any other court or commonly accepted valuation.
• In re: American Suzuki Motor Corporation
  Bankruptcy court finds car dealer’s claim for fair market value of its franchise based on state law dealer statute is invalid under Bankruptcy Code; expert testimony only supports past lost profit damages for cars and parts and accessories in stock at tim ...
• In re: LightSquared Inc.
• In Re: LMR, LLC
  In Chapter 11 proceeding, Bankruptcy Court approves debtor hotel owner’s reorganization plan over objection of creditor that holds both secured and unsecured claims; applying the “Till formula approach,” the court decides the plan’s proposed 6% “cramdown”
• In the Matter of Elizabeth Ann Evert (Debtor): Marsha G. Milligan v. Elizabeth Ann Evert
  The U.S. Court of Appeals for the Fifth Circuit reversed the bankruptcy court’s decision that permitted Evert to exempt under sec. 522 a promissory note she received from her former husband under their divorce decree. The court found that alimony was addr ...
• In the Matter of TCI 2 Holdings, LLC
  Bankruptcy court considers key valuation evidence—including total enterprise value, cost of debt, debt service capacity, and capex/EBITDA proections—in confirmation of reorganization plan for Trump casinos.
• Joseph D. Olsen, Trustee of Huntley Ready Mix, Inc. v. Gary A. Floit
  The U.S. Court of Appeals for the 7th Circuit considered whether the sale of a company by its 100% shareholder was fair to the company. The company was sold at its asset value plus an amount for a noncompete agreement with the shareholder.
• Kool, Mann, Coffee & Co., et al. v. L. Coleman Coffey, et al.
  The U.S. Court of Appeals for the 3rd Circuit recalculated the bankruptcy court’s valuation of a marina and houseboat rental business.
• Kumho Tire Co. v. Carmichael
  At issue is the admittance of expert testimony.
• LaSalle National Bank Association v. Paloian
  Federal district court reviews bankruptcy decision for hindsight bias in determining insolvency, including expert opinions that allegedly used inflated company-specific risk premium, improper tax affecting, and ignored contemporaneous market data.
• Lippe v. Bairnco Corp. (I)
  In this bankruptcy adversary proceeding, the trustees as plaintiffs sought to prove that the defendants—Bairnco Corp., Keene Corp., and the individual managers of the companies—had engaged in a series of fraudulent conveyances among subsidiaries to protect assets from the reach of asbestos claimants.
• Lippe v. Bairnco Corp. (II)
  Follow exclusion of plaintiffs’ witnesses (see May 2003 BVU) the court denied plaintiffs’ motion to substitute a new valuation expert or submit a supplemental expert report, finding that defendants would be severely prejudiced.
• Lippe v. Bairnco Corp. (III)
  The U.S. Court of Appeals affirmed the district court’s decision to exclude Lippe’s valuation experts because their experts’ reports contained significant flaws that primarily related to the failure to explain assumptions involving the comparable company.
• Makula v. Sanwa Business Credit Corp.
  At issue is the admittance of expert testimony.
• McDuffie v. O'Neal
  At issue is the defendant's appeal to the valuation of Blue Flame Gas Co., Inc ...
• Miller Bros. Coal v. Consol of Kentucky, Inc.
  Bankruptcy case discusses downward adjustment to discount rate used in calculation of lost profits damages to account for current market disruptions and risk.
• Monsanto Co. v. Roeder
  In another patented seed case, expert for Monsanto persuades court to accept a benefit/risk model to assess reasonable royalty damages, plus enhanced damages for malicious infringement.
• Monticello Arcade v. Lyall
  At issue is whether the bankruptcy court accurately valued Debtor's 100% stock interest in Lyall Design, Inc.
• Mungo v. Taylor
  Defendant Taylor was plaintiff Mungo's attorney in her divorce. Mungo objected to Taylor's proof of claim for attorney fees in her bankruptcy, alleging legal malpractice.
• Nelson v. Walnut Investment Partners
  Bankruptcy court denies Daubert motion and grants summary judgment based largely on expert insolvency analysis, despite “professional” disagreement on data used to calculate small stock premium, cost of debt, and company-specific risk premium.
• Nesser v. Boston Restaurants
  At issue is the valuation of debtor's fifty percent interest in Boston Restaurants.
• Official Committee of Unsecured Creditors v. Calpers Corp. Partners, LLC
  In bankruptcy dispute, court rejects parties’ Daubert challenge to opposing expert testimony; defense expert did not blindly rely on management projections for capital adequacy and balance sheet tests, and plaintiff’s expert did not use hindsight to find debtor was insolvent on fund transfer dates.
• Paloian v. LaSalle Bank
  7th Circuit finds that tax affecting and discounts are inappropriate in an insolvency analysis and that a trustee for securitized assets is an “initial transferee” for purposes of the Bankruptcy Codes' provisions on preferential transfers.
• Peltz v. Hatten
  Adversarial proceeding in bankruptcy in which the liquidating trustee asserts fraudulent transfer of stock.
• Pension Benefits Guaranty Corp. v. CF&I Fabricators (In re: CF&I Fabricators)
  Parties disagree as to the method that should be employed to determine the present value of future payments because of two ERISA provisions.
• Pereira v. Dow Chem. Co. (In re Trace Int’l Holdings, Inc.)
  This case raises the novel application of judicial estoppel to inconsistent positions, both of which the plaintiff took successfully in an earlier action against different parties.
• Post-Confirmation Comm. for Small Loans, Inc. v. Martin
  Court finds Daubert centers on reliability, not persuasiveness, and can accommodate experts’ different approaches to determining solvency in case with multiple debtor entities; court rejects exclusion of expert opinion relying on GAAP-based financials.
• Pryor v. Tiffen (In re TC Liquidations LLC)
  Bankruptcy court discredits intangible asset appraisal of debtor’s patents, unpatented know-how, customer relationships, and trademarks, finding these have no value apart from an ongoing business concern.
• r2 Advisors, LLC v. Equitable Oil Purchasing Co. (In re Red Eagle Oil, Inc.)
  Debtor’s fuel supply rights had value either in form of an implied contract, customer relationship, or simply an income stream, court says; court does not assign specific value but finds appraiser overstated its value due to misunderstanding of key facts.
• Redmond v. NCMIC Fin. Corp. (In re Brooke Corp.)
  Court credits trustee expert’s analysis of debtor’s balance sheet, finding the expert showed debtor’s practice of immediate recognition of initial franchise fees as revenue violated GAAP and debtor was continuously insolvent; transfers are avoidable.
• Samson v. Western Capital Partners LLC (In re Blixseth)
  Bankruptcy Court credits trustee’s expert’s cash flow analysis in finding “billionaire” debtor was insolvent at the time she signed a guarantee for a $13 million loan defendant made to her son; because the transfer was fraudulent, the court sets aside the ...
• Scott v. Universal Fidelity Group
  At issue is the meaning of "net worth" under the Fair Debt Collection Practices Act ("the FDCPA").
• Stadtmueller v. Fitzgerald (In re Epic Cycle Interactive, Inc.)
  Bankruptcy court finds expert’s analysis “blurred the line” between going concern and liquidation value, detracting from opinion’s credibility; but court approves of expert’s “precise” time frame for capturing data with which to determine solvency.
• Superior Offshore International, Inc. v. Schaefer
  Federal court admits experts’ determination of company’s capitalization based on publicly available information under Daubert, stating that even though using this type of information is not the preferred method, it may be acceptable when the company’s sto ...
• Tidwell v. Leskosky
  At issue is the exemption of respondent's shares in several corporations.
• Trans World Airlines, debtor v. Trans World Airlines Official Committee of Unsecured Creditors
  At issue is the valuation of Trans World Airlines' assets and liabilities.
• U.S. Bank N.A. v. Verizon Communications Inc.
  District court finds expert “forced” spun-off company’s low value by calculating a DCF value that “is low in the extreme and implied an incredibly low trading multiple for the [subject]”; the expert selected “the most pessimistic projections” of future pe ...
• United Airlines, Inc. v. Regional Airports Improvement Corp.
  Bankruptcy court errs in applying discount rate and rental rates when valuing improvements to leased airport space under discounted cash flow method.
• Valley Vulcan Mold v. AMPCO
  At issue is the admittance of expert testimony.
• VFB LLC v. Campbell Soup Co. (II)
  3rd Circuit upholds District Court finding that objective evidence from public equity market is superior to expert valuations.
• Villaje del Rio, Ltd. v. Colina del Rio, L.P.
  Court precludes developer from testifying as an expert regarding construction project’s solvency and value, and it strikes two valuation experts because they relied on appraisals prepared during financing phases of the project, not its construction phases ...
• Vision-Park Properties v. Seaside Engineering
  District court finds unique risks facing debtor in bankruptcy and emerging from it justify Bankruptcy Court’s increase of proposed discount rate and record supports confirmation of reorganization plan.
• Waller v. Pidgeon
  Insolvency of hedge funds turns on book value versus "fair valuation" of debts.
• Weinman v. Crowley (In re Blair)
  Bankruptcy Court excludes as unreliable and irrelevant expert’s solvency opinion and balance sheet; court says expert lacked the facts and data necessary to enact his chosen method and “failed in numerous ways” to reliably apply the facts and data in accordance with the selected method.
• Weisfelner v. Blavatnik (In re Lyondell Chem. Co.)
  Court says trustee fails to show debtor was insolvent under any applicable financial condition tests; contemporaneous industry analysis and valuations by financing banks belie claim that management projections in support of merger were unreasonable.
• Whyte v. C/R Energy Coinvestment II, L.P. (In re SemCrud)
  Bankruptcy Court values Chapter 11 debtor on a going concern basis and finds the income approach is best suited to determine solvency at the time of critical financial transactions; the defendants’ expert properly relied on a contemporaneous Goldman Sachs ...