Valuation

This session will outline methods of developing meaningful and timely revenue and cash flow forecasts for financially distressed businesses, including considerations that management takes into account in developing its forecast, commentary on relevant case law concerning such matters, and factors that could be considered by interested third parties and practitioners regarding the reasonableness of such projections, such as modeling techniques.

This session will take a look at different valuation techniques, including asset approaches, market approaches and income approaches. Concepts such as time value of money, discounted cash flows, determining the discount rate and cost of capital, and terminal value assumptions will be illustrated. Comparable companies and precedent transactions to establish the relative enterprise and equity value of firms will also be examined and discussed.

This panel discussion will provide an update on recent developments regarding valuation in a distressed or bankruptcy environment. While some general valuation information will be included for context, the focus is on understanding the nature of current issues and their implications on future cases.

Past valuation panels have focused on the three traditional methods for determining the enterprise value of an operating business: DCF, comparable company and comparable transaction. This panel will focus on sources of value or reductions in value that are sometimes disregarded, such as excess cash and working capital, underutilized real estate and hard assets, claims and other contingent assets, insurance claims, intellectual property portfolios, discontinued businesses and NOLs.

The federal code (and similarly state law) define "insolvent" as a "financial condition such that the sum of [the] entity's debts is greater than all of [the] entity's property, at a fair valuation..." 11 U.S.C. § 101(32)(A). Fair valuation is not defined in the bankruptcy code. How does fair valuation for solvency differ from fair market value which is used for valuation for income tax purposes? Or fair value which is used in shareholder oppression matters?