Restructuring
Restructuring is often a time when the underlying value of assets needs to be identified clearly. A clear and understandable valuation sets a baseline from which negotiations can go forward.
It should come as no surprise that a buyer and a seller’s opinion of value are rarely the same and it is unlikely that both sides will declare the same opinion.
A valuation offers a considered opinion of value and a datum point from which to negotiate in order to reach an agreement.
A valuation of Tangible or Intangible assets by an experienced professional lays down a marker based on solid experience. Where there is to be a restructure an independent valuation should offer comfort to both sides that the deal is being done at “arms length”.
Where the revenue is likely to scrutinise a transaction, an independent valuation serves as a “Firewall” between the Revenue and the Directors or their Advisors.
Debentures and Mortgages often take a blanket covenant over assets including Intellectual Property and Intangible Assets.
Where restructuring involves the sale or transfer of Assets between
linked companies it is particularly important that the value is
independently assessed if there is any likelihood of a dispute or an insolvency event.
If there is any risk of an insolvency event it should be considered that the
assets may eventually come under the control of Insolvency Practitioners or Creditor Committees who may not understand fully such assets. This is particularly relevant where Intellectual Property or other Intangible Assets are concerned.