NO CLE - Reorganization Value, § 363 Value, and the Games People Play

Today’s chapter 11 cases tend to include upfront announcements of the debtor’s preferred exit strategy. We often see the debtor’s first-day announcement of a pre-negotiated plan structure or an already “half-baked” sale process, as well as DIP loan covenants, driving the announced strategy to a quick and assured conclusion. But what if that plan or sale process is not designed (perhaps intentionally so) to accurately reflect the business’s true inherent worth? This panel will explore how a debtor’s ultimate valuation can be determined more by the bankruptcy process than by the underlying business data.