Corporate finance and valuation

Overview

Bates White has significant experience and expertise providing rigorous analysis involving corporate asset valuation and related corporate finance topics. Our experts have the financial and economic skills critical to effectively analyze a full range of finance-related issues involved in litigation facing firms today. The breadth of our work includes measuring and valuing corporate assets, liabilities, contingent obligations, and bankruptcy claims. We have also created estimates regarding cost of capital, a firm’s profitability, and the value of various firm strategic opportunities. Our analysis has also involved evaluating the impact of corporate transactions such as purchases, mergers, or divestitures. In a variety of situations, our experts have used methods such as discounted cash flow, relative valuations, and real options to estimate the value of corporate assets and company strategies. Our knowledge and experience allow us to deliver rigorous, tailored analyses and to provide strategic insights in a consulting or litigation context.

  • Submitted an expert report in state court on damages alleged to have been caused by various employees leaving one corporation for a competitor. Estimated potential damages after controlling for appropriate business and economic factors and analyzed issues related to economic causation.
  • Submitted expert reports in federal court on the value of various transactions proposed in the reorganization of a bankrupt entity. Analyzed the economic substance of the transactions and valued financial securities that would be created as part of the reorganization including equity, options, and fixed-income securities.
  • Researched and analyzed market position and product revenues for a $10 billion multifaceted consumer finance company on behalf of a prominent investment group. Conducted in-depth investigation of the finance company’s auto finance, mortgage origination, mortgage servicing, and subprime business units.
  • Developed, structured, and directed damages analyses and valuations of loss of enterprise value and growth opportunities suffered by a privately held manufacturing subsidiary of a publicly traded, multibillion dollar international conglomerate. Losses occurred as a consequence of an insurance company’s failure to provide insurance payments for asbestos liability indemnification and defense costs.
  • Provided expert testimony rebutting merger-related allegations of fraudulent misrepresentation. Analyzed plaintiff- and defendant-related news and stock trading histories, the pre-announcement effect of mergers on stock prices, and merger-related stock price premia. Estimated the value of plaintiff and defendant equity but for the merger, taking into account firm, industry, and market events, as well as option features, liquidity discounts, and control premia. Calculated the discounted present value of plaintiff’s funded debt but-for the merger. Assessed damages as the difference between the true value of plaintiff and debtor assets and liabilities exchanged.
  • Evaluated whether compensation paid to the management of a publishing firm charged with breach of fiduciary duty was reasonable given the historical financial performance of the company and its industry peers. Performed event studies to assess the impact on the company’s stock price of disclosures of management’s strategic initiatives, buyout, resignation, and related litigation.
  • On behalf of the unsecured creditors committee of a multibillion dollar, multinational debtor operating under Chapter 11, assessed damages attributable to defendants’ aiding and abetting a breach of fiduciary duty by debtor insiders. Conducted forensic analysis of debtor transaction records. Adjusted transaction records to restate debtor’s reported revenues, debt, and cash flows consistent with the economic substance of subject transactions. Quantified damages associated with the destruction of debtor equity value. Computed as-is and but-for profitability, coverage, leverage, and cash flow ratios to determine the effect of as-is financial reporting on debtor’s credit rating, established causal link between defendants’ actions and damages sustained by the plaintiff, and apportioned damages amongst defendants.
  • Submitted expert reports for and testified on behalf of an insurance company in a dispute between the company and its auditor. Analyzed the company’s subprime commercial lending portfolio and estimated losses on various high-risk loans. Developed damage calculations pursuant to two damage theories: one related to losses on a specific set of loans and a second related to losses on the entire portfolio of borrowing and investments.
  • Developed product profitability studies to model a “typical” vertically integrated manufacturer in the specialty chemical industry. Analyzed aggregate and per unit, variable and fixed, labor, raw material, and overhead costs. Normalized productivity and cost allocation rates. Eliminated intercompany profits. Evaluated relationship between raw material costs, exchange rates, arbitrage, and hedging strategies. Model used to estimate but-for prices in damages settlement negotiations and rebuttal.
  • Prepared solvency analyses to counter insurer claims associated with asbestos liabilities in the European run-off market. Analyses focused on industry and insurer financial position, operating results, current and prospective liabilities, sources of funding, payout trends, and invocation of proportionate cover.