EMERGE-ing Comparable Companies Valuation Analysis
Valuation is at the heart of every chapter 11 case, yet courts regularly observe that it “is much like a guess compounded by an estimate." One court noted, “Regardless of the method used, the result will rarely, if ever, be with-out doubt or variation.” Most financial valuation models are driven by subjective inputs, and on top of that, companies “could — quite legally — cause net income in any given period to be almost any number” regardless of how the business is doing.
Because valuing companies and their assets is such an amorphous task, it is critical that restructuring professionals fully understand the common valuation methodologies and how they can be manipulated. Grasping the basics of the commonly used valuation methodologies will allow for a greater understanding of the leverage and pressure points in a case.
Click below to read the full article as published in the May 2020 edition of the ABI Journal.