Bankruptcy Valuation Experts Offer Guidance in Bankruptcy Matters

In bankruptcy matters, valuation issues are of key importance to a wide range of stakeholders. These include debtors, statutory committees, buyers/stalking horse bidders in section 363 transactions and creditors in contested matters.

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Valuation Issues

Regardless of whether the case involves a large corporation or a small business, valuation issues are a key part of the bankruptcy process. These matters can arise in the cases of individuals, couples in divorce or in reorganization, and they are important to all stakeholders along the way.

Valuation problems can affect the estate of a person, and they can also have an impact on the financial health of a business. Lenders, investors and even the courts are more likely to accept a certified valuation that follows accepted guidelines.

Some of the most difficult types of assets to value are e-commerce property, jewelry, agricultural land and crops, industrial equipment, livestock, broadcasting equipment and other media property, antiques and intellectual property. An experienced valuation expert will use a variety of methodologies to determine the actual value of a particular asset. They may take into account the going concern premise of value, the sales or company comparison approach and the cost approach.

Adequate Protection Issues

Adequate protection refers to a secured creditor’s right to receive protection from the decreased value of its collateral while the debtor in possession uses the property. This is an important concept that is complicated to understand and one that needs careful attention, particularly for creditors with blanket liens or who rely on future cash flows for repayment.

Secured creditors may seek adequate protection in the form of periodic cash payments or additional or replacement liens. 11 U.S.C. SS 361. Ultimately, adequate protection is intended to ensure that secured creditors are not “deprived of the benefit of their bargain.”

A person with an interest in a bankruptcy matter should always consult experienced bankruptcy attorneys before taking actions that may trigger adequate protection issues. This is a complex issue that can have significant impacts on the outcome of a case. The qualified and knowledgeable bankruptcy attorneys at KI Legal are ready to help. Call us today for more information.

Fairness Issues

Bankruptcy matters are often more about negotiating than litigating. Having expert support available improves your negotiating position. Expert substantiation also demonstrates to your adversary that you are serious about your position and can win your case in court should negotiations fail.

Fairness is a generic concept that can apply to almost any decision-making process. For example, if you manually evaluate student admissions and make your decisions based on previous grades, behavior comments, gender, religion, family income, age, and other factors you are likely to have some bias. This kind of bias needs to be evaluated for fairness and tested to see if it complies with pre-established ethical principles.

Brattle consultants have a strong track record of providing evidence-based advice to debtors, creditors, trustees, and courts in complex bankruptcy cases, including major restructuring and liquidation matters, fraudulent conveyance analyses, substantive consolidation, equitable subordination, and monetary damages. We combine industry expertise with analytical rigor in finance, economics, and statistics to help clients and courts resolve challenging issues in complex bankruptcy matters.

Lien Issues

Liens are a legal claim that lenders can make against a person’s property because they owe money. These liens can prevent people from selling or getting loans on real estate and other personal property such as equipment, vehicles, jewelry and even household items. Some types of liens can be eliminated in bankruptcy proceedings, but others are not. Sometimes liens are wrongly applied and may be removed simply by bringing the issue to the lienholder’s attention.

If a lien cannot be removed, the lien positioning, or priority of the debt will determine what happens next. For example, local governments or the IRS can place liens on property and other assets to collect unpaid taxes. These liens have priority over other debts, so bankruptcy does not always discharge them. A lawyer with experience in real estate and construction law can help a person understand these issues and get them resolved. Contact an attorney today to discuss your case.