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 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.
Bankruptcy Expert Claims DCF Indicates Market Value Better Than the Market
Court authorizes $1.1 billion asset sale of the debtors, despite DCF by lenders’ expert that shows $13.8 billion value.
Valuing Director Guaranties in Bankruptcy: Using a Put Option Approach
Bankruptcy court confirms reorganization plan based in large part on “put option” approach to valuing corporate insider guaranties.
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 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.
More Support for Using More Than One Method (DCF) in Current Valuations
Bankruptcy court finds total enterprise value for large specialty chemical company based on DCF as well as comparable companies and transactions analysis.
Lender Uses Debtor’s Own Appraiser to Show Plan Lacks Financial Feasibility
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 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 Boston Generating
Court authorizes $1.1 billion asset sale of the debtors, despite DCF by lenders’ expert that shows $13.8 billion value.
DCF, Including Tax Affecting and Discounts, May Not Apply to Insolvency Opinions
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’s Code's provisions on preferential transfers.
Bankruptcy Court Prefers Adjusted Balance Sheet Test, Including FMV of Brand License
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 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 Capmark Financial Group
Bankruptcy court confirms reorganization plan based in large part on “put option” approach to valuing corporate insider guaranties.
Experienced BV Expert Manipulated by Resort Owner and Attorneys?
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 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.
Insolvency Analysis Hinges on Reasonableness of Projections
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.