Valuations can vary for a number of reasons, including different assumptions and inputs, and sometimes because of the methodology itself, according to a commentary on Credit Slips by Prof. Michelle Harner. But as one of Harner’s students in Corporate Finance recently pointed out, valuations also likely differ because of the legal position (he actually used the term "self-interest") of the party employing the expert and offering the particular valuation into evidence. Harner is a strong proponent of judicial valuation, despite the potential gamesmanship and uncertainty inherent in valuation testimony. She thinks that the process subjects the valuation to greater scrutiny, better protects under-represented parties, and encourages consensual resolutions. The ABI Commission endorsed the continued use of judicial valuation, as well as the ability of judges to appoint valuation experts to perform an independent assessment of the valuation. http://www.creditslips.org/creditslips/2015/01/the-art-of-valuation.html
To read the Commission’s recommendations on valuation, please click here: https://abiworld.app.box.com/s/rca12wvv3qih6phex1yk
For more analysis and perspective on valuation, be sure to attend ABI’s VALCON 2015 conference from Feb. 25-27 in Las Vegas. For more information and to register, please click here: http://www.abi.org/events/valcon15-emerging-valuation-issues-bankruptcy-and-beyond
