Bankruptcy Court Accepts Rationale for Tax Affecting
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.
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.
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.
Court Finds Facts Back Expert’s Value-Per-Subscriber Metric
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.
‘Reasonably Equivalent Value’ Analysis Is Not a Dollars-and-Cents Issue
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.
Court Admits Solvency Analysis Lacking Specific Valuation of Debtor
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.
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.
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.
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.
In re Greater Southeast Community Hospital Corp. (II)
Bankruptcy Court conducts extensive valuation findings of hospital in fraudulent transfer case.
Bankruptcy Court Indicates Strong Preference for Market Approach, Price Per Subscriber Multiple
This trial court matter involves an adversarial proceeding in bankruptcy in which the liquidating trustee asserts that USN Communications,Inc.'s ("the debtor") purchase of Connecticut Telephone and Connecticut Mobilecom (CT Tel) stock from the Hatten sellers for $68 million was a fraudulent transfer.
Peltz v. Hatten
Adversarial proceeding in bankruptcy in which the liquidating trustee asserts fraudulent transfer of stock.
In re Colonial Realty Company; Hirsch v. Steinberg (I)
At issue is reconsideration and reinstatement of a claim.
Trustee Charges Directors, Financial Advisors, Others in Failed LBO
In this action, the Chapter 7 bankruptcy trustee brings the complaint against "65 defendants and the entire class of selling stockholders, virtually anyone who had anything to do with the LBO … defendants are the buyer, financing banks, debenture holders, directors, officers, controlling shareholders, financial advisors, lawyers and accountants."
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.