• Litigation Consulting - QuickRead Top Story

    The Case for Out-of-Court Winddowns

    January 14, 2026

    A Comparison to a Bankruptcy Proceeding and Views from the Various Stakeholders When a business faces insolvency, the path forward is rarely straightforward. This article examines the reasons why out-of-court winddowns may be a preferred alternative over bankruptcy for private equity sponsors, lenders, and boards of directors. Introduction When a business faces insolvency, the path forward is rarely straightforward. Should the company file Chapter 11 in hopes of reorganizing? Should it liquidate under Chapter 7? Would an assignment for the benefit of creditors (ABC) or a court-appointed receivership make more sense? These options dominate conversations around distressed businesses, but they…

  • Mergers and Acquisitions/Exit Planning - QuickRead Top Story - Valuation/Appraisal

    Overview of Bankruptcy

    June 25, 2020

    Procedures and Bankruptcy Code Changes for CPAs and Consultants A business or individual facing financial distress can utilize three types of federal bankruptcies to attempt to resolve their financial difficulties. This article provides an overview of the differences and when each would be used. Keep in mind that bankruptcy is a legal proceeding and must be handled by an attorney. However, business and financial advisors need to have a good understanding of the process, when a bankruptcy is necessary, and which type is most applicable. Advisors need to be able to take a dispassionate view and assist in advising a…

  • Litigation Consulting - QuickRead Top Story

    Chapter 11 Bankruptcy

    November 29, 2017

    Unsecured Creditors: Risk and Cramdown Rates (Part II of II) This is the second of a two-part article, read Part I here. In October 2017, the Second Circuit Court of Appeals handed down its decision on cramdown interest rates in the matter In re: MPM Silicones, LLC. This decision has already stirred a great deal of discussion regarding cramdown interest rates to be paid secured creditors in Chapter 11 bankruptcy matters. Numerous articles have appeared on-line discussing the impact of this decision. These articles follow in a long line of literature on cramdown hearings and secured creditors. Conversely, little has…

  • Litigation Consulting - QuickRead Top Story

    Chapter 11 Bankruptcy

    November 21, 2017

    Unsecured Creditors: Risk and Cramdown Rates (Part I of II) This is the first of a two-part article. In October 2017, the Second Circuit Court of Appeals handed down its decision on cramdown interest rates in the matter In re: MPM Silicones, LLC. This decision has already stirred a great deal of discussion regarding cramdown interest rates to be paid secured creditors in Chapter 11 bankruptcy matters. Numerous articles have appeared on-line discussing the impact of this decision. These articles follow in a long line of literature on cramdown hearings and secured creditors. Conversely, little has been written about impaired…

  • QuickPress

    Valuation Expertise is Necessary to Navigate Chapter 11

    December 7, 2016

    Once a petition for Chapter 11 is filed with the bankruptcy court, the company usually undertakes a strategic review of its operations, including opportunities to shed assets or even lines of businesses.  The Chapter 11 reorganization process concludes when the bankruptcy court confirms a reorganization plan which specifies a reorganization value and which reflects the agreed upon strategic direction and capital structure of the emerging entity.  Travis Harms and Sujan Rajbhandary, both of Mercer Capital’s Financial Reporting Valuation Group, share some wonderful insight on this process. To read the full article in Mercer Capital’s Financial Reporting Blog, click: Valuation Expertise…

  • QuickPress

    A 1939 Frame of Mind: Old-School NOL Carryover Rules Prevail in Some States

    July 20, 2016

    How Some States Treat Net Operating Losses in Reorganizations A number of states still require corporations undergoing a merger or reorganization to meet a continuity-of-business-enterprise test before they can carry over net operating losses, a rule that hasn’t been in effect federally since the 1954 Internal Revenue Code was enacted.  Ann Holley and Caralee Hall explain. To read the full article in The Tax Adviser, click: A 1939 Frame of Mind: Old-School NOL Carryover Rules Prevail in Some States.

  • QuickRead Featured - QuickRead Top Story - Valuation/Appraisal

    Consider Market Approach Intellectual Property Valuation Methods

    January 27, 2016

    IP Valuation—Beyond the Income and Cost Approach Valuation analysts (“analysts”) are often asked to value debtor company intellectual property (IP) within a business bankruptcy context. Some of the bankruptcy reasons to value IP include the assessment of the following: the debtor’s solvency, a secured creditor’s collateral and protection, the fairness of a Section 363 IP asset sale or license, the debtor’s rejection of its IP licenses (and the implications of that rejection on the IP licensees) under Bankruptcy Code Section 365(n), and the reasonableness of a plan of reorganization. Many analysts immediately think of applying income approach or cost approach…

  • Financial Forensics - QuickRead Featured

    Terms of Art

    September 9, 2015

    Understanding the Language of Chapter 11 Cramdown This article will examine terms of art used in a Chapter 11 cramdown. These terms go hand in hand during a contested or cramdown hearing. The court will work to assure that the bankruptcy definition of these terms is met before confirming a plan. Any expert expecting to testify at a cramdown hearing should have a working knowledge of their meaning.

  • QuickPress - QuickRead Featured - QuickRead Top Story - Valuation/Appraisal

    Commercial Real Estate, Chapter 11 Bankruptcy

    May 27, 2015

    Cram Down Interest Rates (Part I of II) In this two-part series the author provides an overview of the issues confronted by courts and financial experts involved in a commercial real estate (CRE) bankruptcy. In this first part, the author discusses how a financial expert may go about to determine the appropriate interest rate for the underlying claims and analyze the CRE market. In the second part of this series, the author continues this discussion and provides examples that illustrate the approaches discussed in this two-part series.

  • QuickRead Featured - QuickRead Top Story - Valuation/Appraisal

    Financial Experts in Chapter 11 Bankruptcies

    April 22, 2015

    Unique Situations from Common Assignments The assessment of interest rates and appraising the value of a business are assignments not limited to bankruptcy work alone. Most financial experts are familiar with the methods required to perform these tasks. Even in the application of these basic analyses, Chapter 11 bankruptcy may present unusual assignments. This article discusses two unique situations that may arise from these common assignments. The first is the application of the cram down interest rate model when a creditor makes the 1111(b) election. The second considers the concept that the “highest bidder may not be the best bidder”…

  • QuickRead Featured - QuickRead Top Story - Valuation/Appraisal

    Recommended Change Not Needed for Chapter 11 Cramdown Rates

    March 11, 2015

    The Myth of Efficient Market Cramdown Rate In December 2014, the American Bankruptcy Institute issued its Final Report and Recommendations of the Commission to Study the Reform of Chapter 11. The Commission was comprised of 22 professionals. The group included attorneys, academics, financial advisers, and a former bankruptcy judge. After over two years of work, the Commission made more than 200 recommendations to enhance the Chapter 11 process and provide a more efficient, less costly path for smaller businesses seeking bankruptcy. In this article, Dr. Needham discusses the origin of the Commission’s purpose, the recommendations and the impact of the…

  • QuickPress - Valuation/Appraisal

    5 Things to Know About Chapter 11 Bankruptcy and Valuation

    March 11, 2015

    A Chapter 11 reorganization is a chaotic and challenging time for a distressed company says Samantha L. Albert, a senior financial analyst with Mercer Capital. There are many valuation-related considerations that management teams and financial advisers need to have knowledge of. This article discusses five key concepts to focus on when proceeding with a Chapter 11 reorganization. [button color=”blue” link=”http://mercercapital.com/financialreportingblog/5-things-know-chapter-11-bankruptcy-valuation/” target=”_blank” font=”arial” align=”left”]To learn more about Chapter 11 Bankruptcy and Valuation, click here.[/button] This article is republished from Mercer Capital’s Financial Reporting Blog. It is reprinted with permission. To subscribe to the blog, visit http://mercercapital.com/category/financialreportingblog/.

  • QuickRead Featured - QuickRead Top Story - Valuation/Appraisal

    Difficulty with Applying the Contract Rate Approach to Chapter 11 Bankruptcy

    January 21, 2015

    A Case Study, Part 2 of 2 In this second part of the article, Dr. Allyn Needham examines post-Till cases from the northern and western districts of Texas, highlights the problems encountered using the Formula Approach, and tests whether the Contract Approach may have provided a better approach and reduced the incidence of litigation where a cramdown is proposed. Ultimately, Dr. Needham proposes that despite the problems presented by the Formula Approach, the Contract Approach is not a panacea for Chapter 11 bankruptcy matters. Business valuators practicing in this area must understand case precedent and recognize the limits of the…

  • QuickRead Featured - QuickRead Top Story - Valuation/Appraisal

    Difficulty with Applying the Contract Rate Approach to Chapter 11 Bankruptcy

    January 14, 2015

    A Case Study, Part 1 of 2 In the Till decision, the U.S. Supreme Court selected the Formula Approach to provide a straightforward, familiar, and objective method for determining the cramdown interest rate to be paid on secured claims in Chapter 13 cases, minimizing the need for potentially costly additional evidentiary proceedings. Many bankruptcy courts have found this decision instructive and directive for Chapter 11 matters. However, the application of the Formula Approach for determining the cramdown interest rate on secured claims in Chapter 11 matters has not made for a straightforward approach, nor has it eliminated sometimes lengthy and…

  • QuickRead Featured - QuickRead Top Story - Valuation/Appraisal

    Three Common Roles for Financial Experts

    November 12, 2014

    In Chapter 11 Bankruptcies, Part 2 Financial experts may be called on to provide a number of services in Chapter 11 bankruptcy cases. Common among these services is the analysis of the interest rate to be paid on secured claims, the valuing of the bankrupt business or a portion of the bankrupt estate, and the creation or analysis of cash flow projections to assist in determining the feasibility of the reorganization plan. None of these functions are exclusive to the bankruptcy courts. However, in applying commonly used techniques, an expert must be aware of the methodologies that have been accepted…

  • QuickRead Featured - QuickRead Top Story - Valuation/Appraisal

    Three Common Roles for Financial Experts

    November 4, 2014

    In Chapter 11 Bankruptcies, Part 1 of 2 Financial experts may be called on to provide a number of services in Chapter 11 bankruptcy cases. Common among these services is the analysis of the interest rate to be paid on secured claims, the valuing of the bankrupt business or a portion of the bankrupt estate, and the creation or analysis of cash flow projections to assist in determining the feasibility of the reorganization plan. None of these functions are exclusive to the bankruptcy courts. However, in applying commonly used techniques, an expert must be aware of the methodologies that have…

  • QuickRead Top Story - Valuation/Appraisal

    Structuring the Intangible Asset Analysis Assignment

    October 22, 2013

    The standard 10 stages to use in an intangible asset engagement In this second installment, Robert F. Reilly completes his review of the 10 typical stages of any intangible asset analysis engagement. For purposes of this article, an intangible asset analysis may include a valuation, damages analysis, transfer price study, or other economic analysis. The business appraiser will typically consider these stages, or elements, before, during, and after performing any quantitative or qualitative analyses.

  • QuickRead Featured - Valuation/Appraisal

    Structuring the Intangible Asset Analysis Assignment

    October 16, 2013

    The standard 10 stages In this first half of his two-part series, Robert F. Reilly summarizes six of the ten typical stages of any intangible asset analysis assignment. For purposes of this article, an intangible asset analysis may include a valuation, damages analysis, transfer price study, or other economic analysis. The business appraiser will typically consider these stages, or elements, before, during, and after performing any quantitative or qualitative analyses.

  • Case Law - QuickRead Featured

    Tax Court Considers Renovation Value of $10M Home; Bankruptcy Court and Expert Testimony

    February 20, 2013

    A Petitioner Relies Reasonably on His CPA in Gaggero v. Commissioner, the Tax Court Finds. That Makes a Difference: Here’s Why. In Gaggero v. Commissioner, Judge Holmes at the U.S. Tax Court disagrees with the IRS’s contention that the plaintiff conducted an improper scheme to avoid capital gains.  In First Street Holdings NV, LLC v. MS Mission Holdings, LLC, Judge Markell at the U.S. Bankruptcy Court finds a lower bankruptcy court’s errors to be likely prejudicial.