Yaquinto v. Thompson St. Capital Partners (In re Stone Panels, Inc.)
Trustee argued that a cash transfer by debtor was a constructively fraudulent transfer under the bankruptcy code. The Trustee was able to show that the transaction was an interest in property for which debtor did not receive reasonably equivalent value. The Trustee was not able to show that the debtor was insolvent at the date of the transfer or became insolvent as a result of the transfer. The debtor was engaged in a business for which the property remaining was sufficiently capitalized. It appeared that the debtor would have sufficient access to cash to service its obligations and operate its business in a sustainable way. The Trustee failed in its burden of proof.
Property Transfer Was Not Fraudulent Because Debtor Was Not Insolvent
Trustee argued that a cash transfer by debtor was a constructively fraudulent transfer under the bankruptcy code. The Trustee was able to show that the transaction was an interest in property for which debtor did not receive reasonably equivalent value. The Trustee was not able to show that the debtor was insolvent at the date of the transfer or became insolvent as a result of the transfer. The debtor was engaged in a business for which the property remaining was sufficiently capitalized. It appeared that the debtor would have sufficient access to cash to service its obligations and operate its business in a sustainable way. The Trustee failed in its burden of proof.
Six Tips for Handling Key Issues in Tricky Bankruptcy Valuations
A number of issues have emerged that analysts will encounter when performing a valuation in a bankruptcy context. Valuation analysts who become involved in bankruptcy-related assignments should expect their work to come under a great deal of scrutiny because most of these engagements are done within a litigation or some other adversarial context, cautioned Robert Reilly, a managing director at Willamette Management Associates, during a BVR webinar back in 2017. While his remarks were made a few years ago, they continue to resonate, and a chapter from Business Valuation and Bankruptcy: Case Law Compendium, 3rd edition, contains more of his timeless advice on how to handle the challenges valuation experts will face.
Choose Your Client Wisely in a Bankruptcy Engagement
Robert Reilly (Willamette Management Associates) and Josh Shilts (Shilts CPA) conducted an informative session on valuations for bankruptcy at the AICPA FVS Conference.
2020 Top Business Valuation and Damages Cases
Complicated as the year 2020 was, it was not boring. The past year offered a wealth of lawsuits dealing with business valuation and economic damages issues. The list below shows our Top 10.
What the New Subchapter V in Bankruptcy Means to Business Valuers
Michael D. Pakter (a managing member at Gould & Pakter Associates LLC in Chicago) discusses the new niche subchapter of the Bankruptcy Code that creates an easier and less expensive path for small businesses to reorganize and survive.
Small Business, Bankruptcy and Business Valuation
The Small Business Restructuring Act makes Chapter 11 reorganization proceedings faster, cheaper and more efficient for companies that come to Bankruptcy Court with debts below the statutory cap. That may allow certain small business to survive the current turmoil resulting from the corona virus pandemic. What is, however, not yet clear is the role of business valuators in the process. Michael Pakter explains what that role might be.
BVU News and Trends July 2020
A monthly roundup of key developments of interest to business valuation experts.
AICPA issues FAQs on valuing distressed or impaired businesses
Strong companies may see the current pandemic as an opportunity to fortify their balance sheets and other assets, according to the AICPA’s FAQs on Valuation Considerations When Valuing Distressed or Impaired Businesses.
The Impact of COVID-19 on Restructuring, Insolvency & Impairment
The world of valuation has changed along with everything else. In this panel on the Impact of COVID-19 on Restructuring, Insolvency & Impairment, three experts will discuss the changing environment for valuation assignments. Craig Jacobson, Richard Peil, and Dan Korcyk each bring a unique perspective and will discuss three specific areas where valuation activity might increase due to the virtual shutdown of the U.S. economy. Finally, we will discuss topics related to performing valuations in ...
Valuing Distressed and Impaired Companies in the Time of Coronavirus
The Coronavirus Pandemic has created perhaps the most unusual economic downturn at least in our lifetimes and likely in the past 100 years. For Americans, the Pandemic stopped in its tracks one of the most explosive economic growth and expansion in many years, if ever. Overnight almost, businesses that were economically sound and growing were turned into distressed and impaired businesses. Jim Alerding will analyze the valuation perspective needed to value a distressed or impaired ...
Global BVU News and Trends May 2019
Business valuation news from a global perspective.
Global BV News: EBA issues valuation handbook for bank resolutions
The European Banking Authority (EBA) has published the “Handbook on Valuation for Purposes of Resolution,” which is addressed to national and EU resolution authorities.
Lack of Facts and Data Render Expert’s Fair Value Balance Sheet Not Helpful
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.
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.
Twelve Practical Ideas From NACVA’s 2018 Annual Conference
There was no shortage of good ideas at the annual conference of the National Association of Certified Valuators and Analysts (NACVA) in Las Vegas this past June.
BV buzz at NACVA’s annual conference
BVWire was in Las Vegas last week at the annual conference of the National Association of Certified Valuators and Analysts (NACVA).
The Use of Financial Projections in Solvency Opinions
Financial projections are often a key input to the financial models used to assess solvency, but projections prepared by management or its professional advisors are sometimes overly optimistic. Here’s how to identify whether projections are reasonable and to assess the level of risk.
BVU News and Trends June 2018
A monthly roundup of key developments of interest to business valuation experts.
Monte Carlo in court
During a recent webinar on the use of Monte Carlo for valuing distressed companies, an audience member asked: “Have the bankruptcy court and other courts accepted the Monte Carlo method?”
Management forecasts receive close scrutiny from courts
In assessing the soundness of valuations, courts in a variety of cases have been paying close attention to the management projections appraisers have used or decided not to use in performing their value analyses. If courts are scrutinizing projections for reliability and plausibility, experts hoping to prevail in the litigation context must do so as well.
Management projections take center stage in bankruptcy case
In a complex bankruptcy case involving players in the petrochemical industry, the court trained its eyes on the management projections underlying a merger that led to the formation of a company that went bankrupt only a year after the close of the transaction.
Flop film poses unique valuation challenge
A recent bankruptcy-related case in front of the California Court of Appeal raises important questions about how one quantifies the value of a dated piece of art, a film, for which there never was a market in the first place.
Daubert tests reliability of testimony, not power of persuasion
The plaintiff, representing the debtor enterprises, sued executives of related family-run consumer lending and retail businesses that had filed for Chapter 11 bankruptcy over allegedly fraudulent transfers.
Bankruptcy Court’s Going-Concern Valuation Weathers Appeal
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.