How Recent Insolvency Reform in the UK Impacts Business Valuations
Driven by the pandemic, the Corporate Insolvency and Governance Act (CIGA) 2020 is the largest reform to insolvency law in the United Kingdom in over 20 years. Although targeted to large companies, the impact on business valuation methods and standards will likely trickle down to smaller firms.
BV News and Trends June 2021
A monthly roundup of key developments of interest to business valuation experts.
New edition of BVR’s Bankruptcy Case Law Compendium
Virtually every bankruptcy case is intertwined with valuation issues at almost every stage of the process, which is why BVR’s Business Valuation & Bankruptcy: Case Law Compendium, 3rd edition, is a must-have resource.
BVU News and Trends February 2021
A monthly roundup of key developments of interest to business valuation experts.
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.
‘Plenty of room' for new experts in bankruptcy valuations, says Reilly
There is “plenty of room in the bankruptcy discipline for new practitioners,” says Robert Reilly (Willamette Management Associates), who co-presented a session at the recent AICPA FVS Conference with Josh Shilts (Shilts CPA).
New ‘Subchapter V’ bankruptcies gain steam
Valuations have always been a crucial element in bankruptcies.
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.
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.
Court Finds Valuation of Debtor Entity Must Account for COVID-19 Effect on Industry
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 Allocation Dispute Related to § 363 Sale, Bankruptcy Court Bridges Experts’ Value Gaps
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 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.
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.
Important bankruptcy ruling on how to value oil and gas assets
Valuing oil and gas assets requires special expertise, as is evident from a recent bankruptcy ruling that includes a thorough examination of the parties’ valuation evidence.
Court Credits Debtor’s Asset Valuations but Rejects Chapter 11 Plan
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 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.
Daubert Flexible as to Solvency Determination for Multiple Debtor Entities
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.
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.
Bankruptcy Court’s Going-Concern Valuation Weathers Appeal
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.
Daubert Flexible as to Solvency Determination for Multiple Debtor Entities
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.
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.
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.
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.