Business Valuation and Bankruptcy

by Ratner, Ian; Stein, Grant T.; Weitnauer, John C.

• ISBN13: 9780470462386
• ISBN10: 0470462388
• Edition: 1st
• Format: Hardcover
• Copyright: 2009-11-23
• Publisher: Wiley

Summary

An essential guide to business valuation and bankruptcyBusiness Valuation and Bankruptcy helps you-whether you are an accountant dealing with a troubled company, a lender, an investor, a bankruptcy and restructuring lawyer/financial advisor, or a private equity player-to focus on solving everyday and case determinative disputes when creditors, lenders, and debtors have differing views of value.Introducing valuation issues early on in the restructuring/bankruptcy process so you can plan accordingly, this book offers Many real life case examples, case descriptions, and tables to demonstrate the applicable sections of the Bankruptcy Laws A review of the methods, applications, pros and cons of restructuring with the basic tools to understanding it A description of the life cycle of a troubled company and the various stages of a restructuring An analysis of the valuation issues that confront practitioners in the real world of application of the lawBusiness Valuation and Bankruptcy is written in terms that are common to bankruptcy professionals and is essential, timely reading for players in the bankruptcy and restructuring environment.

Author Biography

Ian Ratner, CPA, ABV, ASA, CFE, of GlassRatner Advisory & Capital Group LLC, is a nationally recognized financial advisor, focused in the area of forensic accounting, litigation support, business valuation, and bankruptcy consulting. He has a proven track record as an expert advisor and has led high-profile and complex assignments including failed transactions, SEC investigations, financial reporting frauds, large corporate bankruptcies, and countless commercial litigation matters. In many of these cases, he is asked to decipher contradictory valuation opinions and testimony by getting behind the numbers relied on by others. Ian has testified as an expert on dozens of occasions in state and federal courts in various jurisdictions around the country.

Grant T. Stein is partner in the law firm of Alston & Bird LLP in the Bankruptcy, Reorganization and Workouts Group. He is a Fellow of the American College of Bankruptcy, Chair and past president of the Southeastern Bankruptcy Law Institute, and is identified as a top practitioner in Chambers USA: America's Leading Lawyers for Business, The Best Lawyers in America, and Super Lawyers magazine. During his more than twenty-five years of practice, he has amassed extensive bankruptcy and litigation experience dealing with valuation questions.

John C. Weitnauer is a partner with the law firm of Alston & Bird LLP in the Bankruptcy, Reorganization and Workouts Group. In 2006, he was co-trial counsel for plaintiffs in a jury trial that involved many business valuation issues, and obtained a verdict stating that over $965,000,000 in transfers were made with the actual intent to defraud the plaintiffs, with $350,000,000 in punitive damages. He has been included in The Best Lawyers in America reference books since 1995. He is profiled in Chambers USA: America's Leading Lawyers for Business. He is a Contributing Editor of two bankruptcy treatises, Norton Bankruptcy Law and Practice and the Bankruptcy Litigation Manual.

Table of Contents

Preface	p. ix
Introduction	p. 1
The Troubled Company Continuum	p. 1
Operational and Financial Disstress	p. 3
The Troubled Company Response	p. 3
Valuation in Reorganization or Bankruptcy	p. 5
Conclusion	p. 6
Industry Practitioners and Standards	p. 7
Professional Organizations and Business Valuation Standards	p. 7
Business Valuation Practitioners and Certifications	p. 14
Conclusion	p. 19
Notes	p. 19
The Basics of Business Valuation	p. 21
The Purpose of the Valuation	p. 21
Standard of Value	p. 22
Premise of Value-Going Concern or Liquidation	p. 23
Valuation Approaches	p. 25
Fundamentals	p. 29
Conclusion	p. 38
Notes	p. 38
Income Approach	p. 39
Discounted Cash Flow Method	p. 41
Capitalized Cash Flow Method	p. 57
Conclusion	p. 58
Note	p. 59
Market Approach	p. 61
Guideline Company Method	p. 61
Comparable Transaction Method	p. 73
Conclusion	p. 81
United States Bankruptcy Code	p. 83
Introduction to the Structure of the Bankruptcy Code	p. 83
Commencement of a Bankruptcy Case and Filing of Schedules	p. 84
Chapter 7 of the Bankruptcy Code	p. 85
Chapter 11 of the Bankruptcy Code	p. 85
Avoiding Powers under the Bankruptcy Code-Preferences	p. 94
Avoiding Powers under the Bankruptcy Code-Fraudulent Transfers	p. 95
Valuation Principles from the Bankruptcy Courts	p. 95
Conclusion	p. 96
Notes	p. 96
Valuations in Bankruptcy as of the Date of the Hearing	p. 97
Introduction	p. 97
Relief from the Automatic Stay and Adequate Protection	p. 98
§ 363 Sales	p. 100
Use of Cash Collateral	p. 105
Disclosure Statement	p. 105
Plan Confirmation-Feasibility	p. 105
Plan Confirmation-Best-Interests-of-Creditors Test	p. 106
Plan Confirmation-Cram Down	p. 106
Conclusion	p. 111
Notes	p. 111
Valuations in Bankruptcy at a Time in the Past-Avoidance Actions	p. 121
Overview	p. 121
Avoidance Actions-Preferences	p. 121
Avoidance Actions-Fraudulent Transfers	p. 123
The Applicable Legal Tests for Insolvency	p. 128
Insolvency Test: Valuation of Debts	p. 129
Insolvency Test: The Valuation of Assets	p. 132
Proof of Insolvency by Retrojection	p. 135
The Insolvency Test: Comparing Assets and Debts	p. 135
Is the Public Market's Assessment in the Past Conclusive Proof of Solvency, Even If the Company Later Fails?	p. 135
Use of Hindsight in the Valuation Process	p. 136
Conclusion	p. 143
Notes	p. 143
Solvency Opinions	p. 149
Introduction	p. 149
Who Uses Solvency Opinions?	p. 149
Solvency Opinion Preparation	p. 151
Solvency Metrics	p. 153
Case Studies	p. 155
Conclusion	p. 157
Notes	p. 157
Daubert	p. 159
Challenges to Experts or Their Testimony	p. 159
Lack of Relevance	p. 171
Practical Lessons from Daubert Cases for Experts and Lawyers	p. 171
Conclusion	p. 173
Notes	p. 173
Appendix	p. 179
Index	p. 255
Table of Contents provided by Ingram. All Rights Reserved.