2015 VALCON

This panel will address the entitlement of a secured lender with a "blanket lien" on a company’s assets to share in the going concern or enterprise value of that company when it is liquidated in a § 363 sale or otherwise dealt with under a chapter 11 plan. The circumstances under which such sharing in “going concern” value has been permitted, the cases on both sides of the issue, and the policy arguments in favor of and against the secured lenders’ right to access such value to satisfy its secured claim will be explored.

This panel will present strategies and tips for presenting financial evidence in chapter 11 cases. Panelists will discuss the selection, roles and fee arrangements of financial advisors and experts, employment applications/standards under the Bankruptcy Code, disclosure, protecting privilege, opinion testimony, use of demonstrative evidence, witness preparation and more.

How do different constituencies “play” the same valuation issue? This panel will explore how and why valuation is an art and not a science in chapter 11, and will take on the challenge of debating whether or not this should trouble us as bankruptcy professionals and investors.

This panel will take a look at developments in legal standards for determining the whole enterprise valuation, and their impact on valuation methodology. What drives the market definition and its underlying policy? When is the market likely to be wrong (and how do you show when not to trust the market)? How reliable is a “robust auction,” and why might the outcome differ from an expert valuation? When is an expert valuation likely to be suspect? The status of the “new value doctrine” and related valuation issues will also be discussed.

This session will examine the legal issues that impact the flow and diversion of the value distribution waterfall, including identifying gaps between the scope of, and the methodology for determining, enterprise value and collateral value; the impact of §§ 502, 506(a), 506(c) and 552 on the allowed amount of secured and unsecured claims; and contractual and non-contractual adjustments to legal priorities (including intercreditor lien agreements, intercreditor claim-subordination agreements, participation agreements and collective action, equitable subordination, intercompany claims and substantive consolidation). Using a hypothetical case, the panel will illustrate these issues and the uncertain and complex valuation, allocation and intercreditor issues that can arise in a multi-tranched, multi-debtor restructuring case

In today’s environment, several options exist for effectuating a restructuring of a company in distress. When is a chapter 11 filing the best option given the costs, risks and potential for reputational damage, and when is it not? This panel will discuss the fundamental questions to be asked when considering the alternatives to bankruptcy and, more specifically, when bankruptcy preserves or creates value.

This panel will consider the robustness of financial models and valuation techniques in assessing the value of financially distressed businesses vis-à-vis the market for debt and equity securities of such businesses. Market efficiency/accuracy will also be considered, as well as the circumstances that might warrant abandoning the values determined by the market in favor of a model-driven value estimate.

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 panel will feature a discussion of basic option concepts, debt and equity claims, bankruptcy priorities and corporate governance issues.

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.