April 09, 2007 According to Management... Fair Market Value = $1.00
Chavez Properties-Airport Parking Albuquerque, L.P. v. Lorentzen, 2006 U.S. App. LEXIS 27735 (November 2006)
Chavez Properties-Airport Parking Albuquerque, L.P. v. Lorentzen highlights the importance of expert valuation testimony in calculating lost profit damages. The dispute involved several income producing parking lots located throughout Metro-Albuquerque. The partnership was created to consolidate operating expenses and streamline the management of the lots. However, shortly after formation, one partner complained that he was harboring more expenses than his counterpart. After several contentious months, the disgruntled partner removed the cash collection machines from the lots, resulting in litigation.
April 03, 2007 Maverick Valuation - An Invented Methodology
Nellson Nutraceutical, 2006 Bankr. LEXIS 3186 (November 29, 2006)
Nellson Nutraceutical, a privately held manufacturer of nutrition bars, filed for Chapter 11-bankruptcy protection in 2006. At issue was the company's $355 million and $10 million in secured and unsecured debt, for the debtors to be "in the money" Nellson's enterprise value needed to exceed $365 million. In September 2006, the bankruptcy court held a hearing to determine the company's enterprise value. Four valuation experts testified in case, three of which utilized standard methodologies - discount cash flow ("DCF"), comparable transactions and comparable companies. A standard DCF analysis segments an entity's future cash into two parts: (1) the projected free cash flow for the interim periods determined via a company's projected financial statements; and (2) a terminal value which estimates the value of a long-term investment in the entity.
