On 24 April 2013, NERA Senior Vice President Dr. Faten Sabry moderated a webcast discussion on recent trends in valuation and bankruptcy litigation. The panelists -- Weil Gotshal & Manges Partner Adam Strochak, and Greenberg Traurig Shareholder Nancy Peterman -- discussed the potential adaptations and changes to standard methodologies when valuing companies with going concern issues (in contrast to valuing companies with stable prospects, which is usually a simpler exercise). Furthermore, there appears to be increased litigation activity challenging acquisitions, and courts are starting to limit options. This webcast offered a general overview of these issues, as well as trends to be aware of if acquiring distressed assets.

Specifically, the panel discussed:

• litigation trends impacting acquisition and transaction structures in bankruptcy;
• the 7th circuit case Castleton Plaza, L.P., 707 F.3d 821 (7th Cir. 2013), which held that a plan providing 100% of the equity to an insider must be subject to competitive bidding;
• cases addressing claims trading and whether the claim is subject to the same defenses in the hands of the acquirer, such as In re KB Toys, 470 BR 331 (Bankr. D. Del. 2012) as compared to an earlier case coming from the SDNY, In re Enron, 379 BR 425 (SDNY 2007); and
• the recent Wamu decisions on treatment of hybrid securities.

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