INTRODUCTION

• Jurisdiction: United States

INTRODUCTION

This second edition of A Practical Guide to Bankruptcy Valuation updates and expands on the topics covered in the first edition. However, the general themes of this second edition have not fundamentally changed from the themes of the first edition.

Valuation analysts ("analysts") are frequently asked to value businesses, business ownership interest, securities, and intangible assets within a bankruptcy context. There are numerous instances within a bankruptcy proceeding where valuation issues impact the bankruptcy estate, the debtor's or the DIP's actions, the creditors' rights, decisions with regard to debtor liquidation versus debtor reorganization, any proposed plan of reorganization, and so forth. A clear, convincing and cogent valuation can assist the parties to the bankruptcy proceeding and/or a judicial finder of fact.

For most property types, there are generally accepted valuation approaches, methods and procedures. There are generally accepted valuation professional standards that most analysts follow,.and there is a generally accepted valuation profession vocabulary. This Guide has attempted to present those generally accepted approaches, standards and jargon.

Within a financially distressed company or bankruptcy context, analysts provide numerous professional services in addition to valuation. Analysts often serve as independent financial advisers related to transaction, financing, solvency and other corporate finance issues. Analysts also serve clients before, during and after the bankruptcy proceeding with regard to transfer pricing, transactional fairness, reasonableness of compensation, financial structuring, transactional structuring, financial accounting and other financial advisory issues. In addition, analysts sometimes serve as forensic accountants with regard to economic damages analysis within a bankruptcy controversy.

In particular, this second edition of the Guide focuses on such topics as:

1. analyst due diligence procedures, valuation procedures and valuation reporting;
2. bankruptcy-related standards of value, premises of value and levels of

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