Lone dissenter of medical merger challenges share valuation
In a California case, a physician was a nonexclusive provider to a physician network and was one of 75 shareholders.
Physician Shareholder Asserts Transaction Bonuses Breach Board’s Fiduciary Duties—Appeals Court Finds Them Just and Reasonable
A physician shareholder claimed that the fair market value of his one share (of 75 total shares) was undervalued when the physician practice was merged and sold to NAMM California, a company that develops and manages physician provider networks. NAMM paid $18 million in the merger, and over $12 million of that amount was paid to individual physician shareholders in the form of “transaction bonuses.” The remaining almost $6 million was paid pro rata to the shareholders. The plaintiff appealed the judgment of the California trial court, but the appellate court deemed the transaction bonuses as “just and reasonable” and affirmed the trial court.
Ghaly v. Riverside Cmty. Healthplan Med. Grp.
A physician shareholder claimed that the fair market value of his one share (of 75 total shares) was undervalued when the physician practice was merged and sold to NAMM California, a company that develops and manages physician provider networks. NAMM paid $18 million in the merger, and over $12 million of that amount was paid to individual physician shareholders in the form of “transaction bonuses.” The remaining almost $6 million was paid pro rata to the shareholders. The plaintiff appealed the judgment of the California trial court, but the appellate court deemed the transaction bonuses as “just and reasonable” and affirmed the trial court.
In re Platinum Corral, LLC
The Bankruptcy Court turned down a plan and amended plan of reorganization primarily because only the debtor would benefit from the plan and creditors would be left with little or no return. The court ordered a new plan be delivered to the court as soon as possible because time was of the essence.
Plan of Reorganization Cannot Be Approved Because Essentially Only the Debtor Would Benefit
The Bankruptcy Court turned down a plan and amended plan of reorganization primarily because only the debtor would benefit from the plan and creditors would be left with little or no return. The court ordered a new plan be delivered to the court as soon as possible because time was of the essence.
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.
Bankruptcy Court Calls Choice of Comparables ‘Key Value Driver’ in Expert Valuations
Ruling on plan confirmation, Bankruptcy Court finds debtor expert’s determination of total enterprise value of reorganized debtor more credible than committee for unsecured creditors’ expert; in adopting debtor expert’s comparable company analysis, court calls choice of comparables set a “key value driver.”
In re Emerge Energy Services LP
Ruling on plan confirmation, Bankruptcy Court finds debtor expert’s determination of total enterprise value of reorganized debtor more credible than unsecured creditors’ expert; in adopting debtor expert’s comparable company analysis, court calls choice of comparables set a “key value driver.”
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.
In re EM Lodgings, LLC
In granting creditor’s stay relief motion, court averages competing expert valuations and finds debtor has no equity in contested hotel; court says value gap is result of experts’ legitimate disagreements over hotel’s future performance as reflected in inputs for DCF-based analyses.
Court Accords Equal Weight to Competing DCF-Based Hotel Valuations
In granting creditor’s stay relief motion, court averages competing expert valuations and finds debtor has no equity in contested hotel; court says value gap is result of experts’ legitimate disagreements over hotel’s future performance as reflected in inputs for DCF-based analyses.
Why Divorce Valuation Does Not Accord With Chapter 7 Liquidation Analysis
Bankruptcy Court says differing standard of value in divorce and bankruptcy proceedings precludes use of divorce valuation of husband’s interest in dental practice; but valuation based on shareholder agreement accords with Chapter 7 liquidation analysis.
In re Cole
Bankruptcy Court says differing standard of value in divorce and bankruptcy proceedings precludes use of divorce valuation of husband’s interest in dental practice; but valuation based on shareholder agreement accords with Chapter 7 liquidation analysis.
Industry Characteristics Bolster Reliance on Net Asset Value
In fight over plan confirmation, court finds nature of industry supports debtors’ reliance on net asset value approach to value Chapter 11 dry bulk shipper but not to the exclusion of more traditional methods; however, court rejects use of DCF.