Court rejects use of historic three-year average under Daubert
Have you ever used a business’s three-year historical annual average to project sales and revenue growth, EBITDA or capital expenditures? Have you ever used the term “zone of insolvency” to describe a business on the brink of bankruptcy? Does your valuation report sometimes omit the precise formula used in your DCF? If you answered “yes” [...]
Expert testimony rescues insured client from post-Katrina business interruption losses
Buffman, Inc. v. Lafayette Insurance Co., 2010 WL 1509363 (La. App. 4 Cir.)(April 14, 2010) In one of the first business interruption/lost income cases to come in the wake of Hurricane Katrina, an expert’s careful, credible opinion proves critical to swaying a jury’s opinion and the court’s ultimate award. Nursing home loses numerous residents to [...]
Valuing asset backed securities can often be counter-intuitive, Kahn tells ASA
“The price of senior tranches in asset-backed securities tends to go up as the default rate, and the severity of the defaults, increases,” Daniel Kahn (National Leader, Complex Securities Valuation, Ernst & Young) told attendees at today’s NYC ASA Business Valuation Conference. “This seems illogical, but the senior tranches are not exposed to reasonable losses, [...]
Can buy-sell agreements bind the non-signing spouse?
In a case of first impression, the Texas Court of Appeals considered a buy-sell agreement that purported to bind shareholders and their spouses in the event of divorce. As a further complication, the husband had signed an employment agreement with the private medical association—but neither he nor his wife had signed the shareholders’ agreement. This [...]
Litigation “crisis” leads to more business courts (besides Delaware Chancery Court)
“Even relatively few lawyers know that there are now business courts specifically designed to handle complex litigation,” the Honorable Ben Tennille (North Carolina) commented at last weeks’ spring meeting of the ABA Business Law Section in Denver, Colorado. As Chief Special Superior Court Judge for Complex Business Cases, Tennille has witnessed the nationwide and now [...]
Expert insights on valuation and bankruptcy
We’ve just posted numerous new articles from Insights, the esteemed valuation quarterly published by Willamette Management Associates and provided exclusively to subscribers of BVResearch. The new content includes special-focus articles on bankruptcy and reorganization analyses by noted Willamette experts Robert Reilly, Charles Wilhoite, and: Financially Troubled Company Purchase/Sale Transaction Structure Issues by Scott Cobb and [...]
New WMA content added to BVResearch
We’ve just added new content from Willamette Management Associates to BVResearch. The latest titles include: Financially Troubled Company Purchase/Sale Transaction Structure Issues by Scott Cobb and Nguyen “Wen” Ho Financial Adviser Procedures Related to Bankruptcy-related Solvency Opinions by Katherine Gilbert Debt is the New Equity: How Private Equity Funds Will Sponsor Buyouts Through Chapter 11 [...]
Litvak, Kennedy, and Mathieu have JofA article this month on valuing post-acquisition damages
Congrats to Jeff Litvak, Ken Mathieu, and Bill Kennedy on their article in this month’s Journal of Accountancy. They look at the types of issues that arise from claims that sellers failed to disclose material issues prior to a transaction. Typical of their analysis, they ask: what if a significant customer was lost just before [...]
A bankruptcy court raises the discount rate because of the bad economy
Appraisers struggling to defend their discount rates will get some guidance from the short discussion in Miller Bros. Coal v. Consol of Kentucky, Inc, 2009 WL 4904032 (Bkrtcy. E.D. Ky.))(Dec. 11, 2009). This downturn is not an ‘act of God.’ In the first half of the opinion, the defendant tried to excuse its breach of a coal [...]
Share your thoughts...