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The Value Of Soft Variables In Corporate Reorganizations, Michelle M. Harner
The Value Of Soft Variables In Corporate Reorganizations, Michelle M. Harner
Michelle M. Harner
When a company is worth more as a going concern than on a liquidation basis, what creates that additional value? Is it the people, management decisions, the simple synergies of the operating business, or some combination of these types of soft variables? And perhaps more importantly, who owns or has an interest in these soft variables? This article explores these questions under existing legal doctrine and practice norms. Specifically, it discusses the characterization of soft variables under applicable law and in financing documents, and it surveys related judicial decisions. It also considers the overarching public policy and Constitutional implications of …
A Simple Theory Of Complex Valuation, Julia Simon-Kerr, Anthony Casey
A Simple Theory Of Complex Valuation, Julia Simon-Kerr, Anthony Casey
Julia Simon-Kerr
Complex valuations of assets, companies, government programs, damages, and the like cannot be done without expertise, yet judges routinely pick an arbitrary value that falls somewhere between the extreme numbers suggested by competing experts. This creates costly uncertainty and undermines the legitimacy of the court. Proposals to remedy this well-‐‑recognized difficulty have become increasingly convoluted. As a result, no solution has been effectively adopted and the problem persists. This article suggests that the valuation dilemma stems from a misconception of the inquiry involved. Courts have treated valuation as its own special type of inquiry distinct from traditional fact finding. We …