Bankruptcy Attorney Skilled in Chapter 11 Business Valuations
New Jersey lawyer works to ensure accurate assessment of a company’s worth
A successful debt reorganization under Chapter 11 of the Bankruptcy Code can save a business from insolvency. An essential step is a valuation of the business’s assets, debts, future earnings capability and marketplace position relative to its competitors. This has multiple benefits for the debtor, such as the ability to obtain the credit it needs to continue operations while carrying out its reorganization plan. The Law Offices of James C. Zimmerman can make sure your business is accurately valued in compliance with accepted standards and methods.
Business valuations serve multiple purposes in Chapter 11 bankruptcies
A Chapter 11 bankruptcy petition must be supported by a liquidation analysis, which describes what creditors would likely recover if the debtor filed for Chapter 7. The liquidation analysis in turn requires calculation of the value of the business’s tangible assets, including collateral for any outstanding debts. This helps determine how much of your assets can be leveraged or converted into cash to fund business operations during the Chapter 11 process. It also helps your creditors to decide whether to accept or oppose the reorganization plan.
Business valuations are important for other purposes, which include:
- Seeking a debtor-in-possession (DIP) loan, in order to keep the business going during the Chapter 11 proceeding
- Reducing the amount of debt the business must repay to creditors
- Identifying unprofitable parts of the business that can be sold off
- Helping to show the reorganization plan is feasible if it is challenged in the confirmation process
These other valuations may require different methods and standards. You may need to determine the fair value the business as a going concern, including intangible assets like intellectual property and good will. We help you decide which approach is appropriate. Although some small business valuations are simple enough for our clients to conduct with our advice and assistance, in other cases we hire outside experts, such as accountants, real estate appraisers and other professionals as necessary. In either case, we make sure this important task is done properly while you focus your energies on keeping the business operations.
What happens if the business valuation is in dispute?
Creditors, shareholders or other interested parties sometimes disagree with the debtor’s valuation of business, or they may submit competing valuations. It is then necessary for us, as your attorneys, to contest the opposing versions. We can sometimes resolve the dispute through negotiations. Other times, the bankruptcy court will hold a hearing to decide the controversy. In either case, we make every effort to ensure the resulting valuation is sound and beneficial to your business interests.
Contact a bankruptcy attorney who understands business valuations
At the Law Offices of James C. Zimmermann, we have the knowledge and experience you need to value your business accurately and in compliance with Chapter 11 requirements. To learn more or to schedule a free initial bankruptcy consultation, call us at 973-764-1633 or contact us online. We are located in Vernon, Wayne, Pompton Lakes, Hackensack and Nutley.
