Kipperman v. Onex Corp.
Federal court affirms it Daubert exclusion of an expert for using unsupported three-year historical averages in his DCF to adjust the debtors’ management projections regarding revenue, debt-free cash flows, capital expenditures, and sales.
Companies in Distress: Valuing the Impaired and Currently Unprofitable
As benchmarks, indicators, and pundits show that the end of recent economic woes are in sight, the fall-out and clean up of recent trouble continue across the economy. Nowhere is this more true than in the arena of business valuation, where the volume impaired and distressed business appraisals continue to escalate. Though the valuation of an unprofitable business is a challenge in its own right, it's only exacerbated by the recent economic environment.
Bankruptcy Court Rejects DCF for Troubled Company
Bankruptcy court rejects DCF analysis in valuation of early-stage mobile satellite systems provider, preferring comparable company analysis provided the debtors’ expert.
Teams of Experts Help Court and Creditors Value Huge, Bankrupt Homebuilder
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.
Bankruptcy Court Chooses Between Market or ‘Reasonable Valuation’ of Troubled Loans
Bankruptcy court approves DCF valuation of troubled loan portfolio as “commercially reasonable determinant of value” under Sec. 562 of the Code, concerning repurchase agreements.
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.
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.
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 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.
Cutting Costs on Expert Testimony and Appraisals Doesn’t Always Pay Off
Court precludes developer from testify 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.
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.
Bankruptcy Court Cannot Just ‘Split the Difference’ in Divergent Discount Rates
Bankruptcy court errs in applying discount rate and rental rates when valuing improvements to leased airport space under discounted cash flow method.
Fair Value at Crux of Chrysler Bankruptcy
Bankruptcy court authorized a preplan of reorganization sale of substantially all of the debtors’ assets based on evidence of fair value in exchange.
Kipperman v. Onex Corp.
Court rejects expert’s unsupported use of three-year historical averages in his DCF to adjust the debtors’ management projections regarding revenue, debt-free cash flows, capital expenditures, and sales.
Expert Solvency Opinions Accused of ‘Hindsight Bias’
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.
May Plantiff’s Expert Assess Control Premium in Damages?
Federal district court considers whether control premium can be an element of damages in fraudulent transfer/breach of fiduciary duties in bankruptcy case.
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 ...
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.
Valuation Evidence Helps Support Trustee’s Successful Claims
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.
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.
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.
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.
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.
Case Considers Control Premiums, DCF Discount Rates, and More
By 2003, a century-old mining company had entered “the zone of insolvency,” according to its valuation and legal advisors.