Duff & Phelps experts are uniquely qualified to address a wide range of (in)solvency-related issues in a dispute context.
(In)solvency-related issues arise in a variety of dispute-related contexts. Pre-petition transfers may be subject to claw back-related litigation via preference and fraudulent conveyance/voidable transaction lawsuits, which often turn on assessments of a debtor’s (in)solvency. Worthless stock deductions are challenged by the IRS if it believes the relevant entity was solvent when the worthless stock deduction was taken. Otherwise valuable causes of action may not be viable when the obligor does not have the wherewithal to pay. These are just a few of the many areas where Duff & Phelps experts address (in)solvency-related issues in a dispute context.
Duff & Phelps experts have addressed (in)solvency-related analysis in claw back-related litigation from many perspectives. Our clients have been plaintiffs, defendants, debtors, and court-appointed bankruptcy examiners. We have addressed:
- Dividends (to shareholders in C-Corps and pass thru entities)
- Leveraged buyouts
- Leveraged recapitalizations
- Placement of guarantees
- Removal of guarantees, and
The debtors’ industries have included chemicals, commercial real estate, commodities, distribution, financial services, home building, land development, oil and gas, telecommunications, unregulated utilities, and numerous other industries. Debtors have been wholly owned companies with publicly-traded and private shares as well as wholly owned subsidiaries and joint ventures. The period between the valuation date and subsequent bankruptcy filing have ranged from a few months to several years. Our thought leadership includes contributions to books, publications in peer reviewed and referred journals, and presentations at nationally sponsored conferences. Simply put, we have substantial experience in this area.
In the rare event where Duff & Phelps experts have not previously addressed insolvency-related analyses in claw back litigation from the relevant perspective in a particular matter, we obtain the relevant expertise. Our leadership position in numerous valuation-related and credit-related areas provides a wealth of knowledge that can be brought to the table when needed. In addition, our partnership with experts (e.g., academic and industry) outside of the firm helps supplement as necessary. Access to these extensive resources is another factor that sets Duff & Phelps apart from many of our competitors.
Our extensive experience with (in)solvency-related analyses in clawback-related litigation is supplemented with, and leveraged, in other dispute-related contexts. As discussed above, we have worked on disputes with the IRS related to worthless stock deductions and advised on how a debtor’s wherewithal to pay affects the viability of otherwise viable causes of actions. Our focus on different contexts strengthens our ability to assess situations affected by (in)solvency-related analyses in a dispute context.