Thursday September 22, 2022
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.
CIGA Restructuring Plan – A Valuer’s Perspective