Thursday September 22, 2022

Jim Davies, Corporate Finance Partner and Valuations Specialist, along with Restructuring Advisory Partners Phil Reynolds and Chad Griffin look at the critical role of valuations in Restructuring Plans

After 10 sanctioned Restructuring Plans (and one declined) it is evident that valuation is key to supporting the court’s decision making process and a focal point for potential challenge.

Valuation under the relevant alternative is the key to comparing Plan outcomes to those under the most likely counterfactual, and to demonstrating the fairness of a cross-class cram down where relevant. With the onus on proposing companies to provide the necessary evidence in support of a Plan, understanding and applying valuation best practice is critical in assessing the relevant alternative and proving the hypothesis that no party is worse off.

Soundings from the first 10 Plans provide a helpful insight into what the process requires from a valuation perspective, and how expectations of the court are developing and building on the experience of valuation analysis in Schemes of Arrangement.

Read the full article

CIGA Restructuring Plan – A Valuer’s Perspective