Valuation, Solvency & Acquisition Disputes | FTI Consulting

Valuation, Solvency & Acquisition Disputes

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The need for a valuation is almost always driven by a significant event in the life of a business. Whether a dispute, an acquisition, or a business transition, an accurate valuation provides critical information for dispute resolution or business action. Valuation is a complex process that requires a combination of fundamental analysis, industry experience and sound judgment. Rendering an opinion of value demands a deep understanding of accounting, finance, economics, and a comprehensive knowledge of valuation principles and methodology. FTI Consulting provides the expertise to establish a value that is both reliable and supportable.

Our Service Offerings

Litigation Consulting and Expert Witness Testimony

Valuation is often at the heart of matters that require litigation consulting and expert witness testimony. The professionals at FTI Consulting have significant experience in providing services to plaintiffs and defendants in litigation, including valuation of entire companies, minority and controlling ownership interests, debt and equity instruments, reasonable premiums and discounts, economic damages, and diminution of value. Our experts have testified in county, state (including Delaware), federal, tax and bankruptcy courts as well as in domestic and international arbitration panels and mediations.

Transaction Advisory Services

Disputes involving transactions such as liquidations, mergers, acquisitions and divestitures frequently require a valuation opinion. Additionally, post-acquisition disputes often stem from valuation issues. A well-supported and independent opinion of value is critical in order to successfully resolve transaction-based disputes. While this is certainly true for privately held enterprises, it is also true for public companies as dispute stakeholders are often hesitant to rely upon the value established by a public market. The professionals at FTI Consulting have issued valuation opinions in numerous disputes involving transactions for private and public companies both pre- and post-acquisition.

Tax Related Valuation Opinions

Valuation is commonly a subject of tax-related disputes involving the IRS or other taxing authorities. A valuation analysis is frequently used to establish a value for non-publicly traded assets that may be subject to estate or gift taxes. Shareholder level discounts – including discounts for lack of control and lack of marketability – in such situations can reduce or eliminate the need to pay substantial taxes. Additionally, there is often a need to value tangible and intangible assets in the context of a purchase price allocation or when valuing stock options. FTI Consulting professionals have the experience and qualifications to issue a valuation opinion that is supportable and defensible and can withstand challenges in a tax-related dispute.

Valuation of Intangible Assets and Goodwill

For many companies, their most important assets are not tangible assets – such as real estate, machinery, equipment or inventory – but rather, intangible assets such as a trained workforce, goodwill, patents, trade secrets, copyrights, trademarks, software and other forms of intellectual property (“IP”). In order to determine the value of such intangible assets, a valuation professional must master a combination of analytical tools and widely accepted valuation techniques and reflect sound judgment. The valuation professionals at FTI Consulting have issued intangible asset valuation opinions in numerous disputes involving misappropriation of trade secrets, IP infringement, sale and dispositions, bankruptcy, restructuring and liquidation.

Restructuring Valuation Services

Virtually every company involved in a restructuring requires the determination and allocation of value. Given the complex and often divisive nature of disputes involving restructurings, the need for reasonable and supportable valuations is paramount. Our valuation professionals have experience in providing valuation services to both debtors and creditors, including the valuation of various operating entities and assets, financial modeling, analysis of projections, analysis of fraudulent conveyances, preparation of valuation reports, presentations to lender groups and corporate boards, and expert witness testimony.

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