Bankruptcy and Financial Distress Litigation

Fraudulent Conveyance and Solvency Analysis

Fraudulent Conveyance and Solvency Analysis

A major component of bankruptcy and fraudulent conveyance actions is forecasting what a company's future cash flows are likely to be, or what they would have been at an earlier point in time. Moreover, statistically defensible estimates about the range of reasonable projections in the past can determine whether a particular action was justifiable in a fraudulent conveyance action. This can be useful information in cases involving a corporate defendant as well as those involving charges of constructive fraudulent conveyance against investment bankers, accountants, and lawyers who assisted in refinancing a company that failed sometime thereafter.
 
NERA's work and our testimony on the issue of inappropriate transfer of assets includes the analysis of whether the transferor was or could reasonably have been believed to be solvent or adequately capitalized at the time of the transfer and whether adequate consideration was received. We go beyond simple accounting estimates of the solvency of a firm at a particular point in time, and instead often investigate fundamental approaches to determining value, including the use of statistical analysis and option pricing formulas to estimate the probability that a firm would become bankrupt over some relevant time frame.
 
NERA also uses option techniques to determine how the value of an asset in a firm's possession would affect the value of shareholder, bondholder, and other stakeholders' financial positions. Our related cash-flow-at-risk (CFAR) analysis also can be used to estimate the likelihood that cash flows will or would have fallen to levels that would trigger bond indenture covenants.

Name Title Location Phone Email
Lucy P. Allen Managing Director New York City +1 212 345 5913 lucy.allen@nera.com
Dr. Anne Gron Managing Director Chicago +1 312 573 2850 anne.gron@nera.com
Dr. Denise Neumann Martin Managing Director New York City +1 212 345 5296 denise.martin@nera.com
Dr. Faten Sabry Managing Director
Bankruptcy Practice Chair
New York City
London
+1 212 345 3285
+44 20 7659 8618
faten.sabry@nera.com
Dr. Ramsey Shehadeh Managing Director New York City +1 212 345 6089 ramsey.shehadeh@nera.com
Dr. David Tabak Managing Director New York City +1 212 345 2176 david.tabak@nera.com
Kurt G. Strunk Director New York City +1 212 345 5035 kurt.strunk@nera.com
Robert Patton Associate Director Toronto
London
New York City
+1 416 868 7318
+44 20 7659 8620
+1 212 345 3269
robert.patton@nera.com
Dr. Stephanie Plancich Associate Director New York City +1 212 345 7719 stephanie.plancich@nera.com
Dr. Airat Chanyshev Senior Consultant New York City +1 212 345 7336 airat.chanyshev@nera.com
Mike King Affiliated Consultant Denver
San Francisco
Washington, DC
+1 303 357 4781
+1 303 618 4915
+1 303 618 4915
mike.king.affiliate@nera.com
Title Type Author
Not All MBS Settlements Are Equal White Paper By Faten Sabry, Sungi Lee, and Linh Nguyen
The Solvency Two-Step Published Article By Dr. David Tabak