Duff & Phelps experts have decades of experience with valuation, credit, financing and accounting-related analyses required to assess a debtor’s solvency across a wide range of contexts.
Solvency-related issues arise in a variety of disputes surrounding a debtor’s bankruptcy. Pre-petition transactions may be subject to clawback-related (e.g., fraudulent transfer) litigation, which often depends on whether the debtor was insolvent at the time. A debtor’s board of directors may be sued for breach of fiduciary duty due to decisions that were made when the debtor was allegedly insolvent.
Solvency-related disputes also arise in other situations. Worthless stock deductions are challenged by the IRS when it believes the relevant entity was solvent at the time the worthless stock deduction was taken. Otherwise valuable causes of action may not be viable, or are much less lucrative, when the obligor does not have the wherewithal to (fully) pay. These are just some instances where Duff & Phelps experts can provide support.
Professionals within our Disputes Consulting practice have worked as either consultants or testifiers across a variety of industries. Solvency-related assessments have included situations ranging from little and no alleged fraud to allegations of wide-ranging fraud. Our team is frequently called upon to provide solvency-related thought leadership via publications and presentations at national conferences. We supplement our engagement team with subject matter experts from within the firm (e.g., valuation expert within a certain industry) or through our partnership with external specialists (e.g., academic or industry) as needed.