Page 8 - Bankruptcy and Reorganization Services

Contents

Chapter 1 — Introduction.................................................................................................................................. 10

Chapter 2 — Scope of This Practice Aid .......................................................................................................... 11

Chapter 3 — Professional Standards and Nonauthoritative Guidance ......................................................... 12

Authoritative Guidance ..................................................................................................................................... 12

Applicability of Litigation Services Guidelines to Business Valuation in Bankruptcy ................................ 13

Application of SSFS No. 1 to the Valuation Engagement ............................................................................ 13

Application of VS Section 100 to Business Valuation in Bankruptcy ......................................................... 14

Nonauthoritative Guidance ............................................................................................................................... 14

Chapter 4 — Purpose of the Valuation and Standard of Value ..................................................................... 15

Overview ........................................................................................................................................................... 15

Standard of Value ............................................................................................................................................. 15

Bankruptcy Code — Fair Valuation ............................................................................................................. 17

Bankruptcy Code — Reasonably Equivalent Value ..................................................................................... 17

Bankruptcy Code — Indubitable Equivalent ................................................................................................ 18

UFTA — Fair Valuation ............................................................................................................................... 18

UFTA — Reasonably Equivalent Value....................................................................................................... 18

UFCA — Present Fair Saleable Value .......................................................................................................... 18

UFCA — Fair Consideration ........................................................................................................................ 19

Chapter 5 — Premise of Value: Going Concern Versus Liquidation ............................................................ 20

Chapter 6 — Need for Valuations in the Context of Financial Distress and Bankruptcy ........................... 23

Adequate Protection .......................................................................................................................................... 23

Assessing the Value of Debtor’s Interest in Collateral, As Well As Current and Likely Future Changes in
Value ............................................................................................................................................................. 23

Claims Determination ....................................................................................................................................... 23

Apportioning Between Secured and Unsecured Claims ............................................................................... 23

Assessing and Quantifying Unliquidated, Contingent, and Disputed Claims and Assets ............................ 24

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