Bankruptcy Consulting And Valuation

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Concerns over issues of value may seem counter-intuitive to many financially troubled companies. However, valuation, correctly applied, is critical to the overall assessment of solvency in many workout situations as well as compliance with bankruptcy and cancellation of indebtedness rules set forth in income tax statutes.

In furtherance of these directives, consideration must be given to valuations prepared in a bankruptcy environment versus those prepared in more traditional engagements.

Included among these key differences is the issue related to standard of value. Does the case require traditional “fair market value” or “fair value” and, if so, how do the statutes or judicial precedent define the terms?

Premise of value is another example of an often-controversial issue in bankruptcy. While most companies are valued under a “going concern” premise of value, facts and circumstances, as well as jurisdictional precedent may dictate liquidation value as the proper premise.

Quality valuations are critical to both creditors and debtors in a bankruptcy proceeding. In addition to providing an effective protection analysis, our business valuation services professionals can perform services such as those listed below for companies in bankruptcy situations.

  • Restructuring strategy development and workout plan feasibility analysis
  • Design and implementation of spin-off strategies
  • Fairness assessment of offers to buy or sell the company or its assets
  • Identification and quantification of reports and analyses for fraudulent conveyances
  • Review of opposing expert’s reports and analyses for proper application of technical guidance and conceptual propriety

These services can significantly improve the chances of making a bankruptcy an efficient and positive business strategy.

Business valuation requires an intimate understanding of the attendant ownership interest to be valued, the operating business to which that ownership interest belongs, the industry within which the business operates and the value influences on the business imposed by economic fluctuations, both regionally and nationally.

The professionals involved in valuation engagements must not only possess strong business valuation technical skills, but, must also understand economics, taxation, accounting and business. Our professionals have demonstrated their knowledge and competence through education, training and experience.