A German technology multinational corporation (MNC) carved out a portion of its business many years ago. Following its initial public offering (IPO), this carved-out business entered bankruptcy. The insolvency administrator is currently litigating against the MNC regarding the company valuation established at the time of the carve-out. This valuation divided the company's worth into a German segment and a rest-of-world segment, making the underlying transfer pricing assumptions that influenced the valuation a central issue in the litigation.

The client (defendant) and their counsel have retained NERA as economic experts. We are advised the client on how to address various controversy matters from a strategic and tactical transfer pricing perspective. A key aspect of this controversy involves the value chain analysis of the carved-out business. An independent appointed court expert has tended to adopt our view against the experts of claimant. Based on this, the client and claimant have settled the case at an acceptable level for client.