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Bankruptcy and Restructuring

Why we are better:
  1. Most business and business asset appraisals rely on financial statements and accounting records. Troubled companies usually have poor financial records, which prevent reliable decisions. By combining appraisers with CPAs and forensic accountants, we are better able to complete missing information, and critique the financial information upon which valuation conclusions are based.
  2. Our appraisers have the highest credentials and meet the highest professional standards. In this unregulated area, it is important to avoid poorly performed work that will ultimately not meet the needs of lenders, courts, and others who will be scrutinizing all conclusions.
  3. Our forensic accountants have substantial experience in performing a wide variety of fraud, internal, and outside investigations. Our background in litigated matters permits us to comfortably operate where others shy away. Because of this experience, our investigators and auditors find things that others miss.
  4. Our computer technologists have substantial experience in record reconstruction and computerized data mining. These efforts allow us to obtain data-based insights that others thought were not possible. Computerized data often also saves substantial costs over the manual alternatives.
  5. We have substantial expert witness experience. If disputes cannot be amicably resolved, our experts apply their significant courtroom experience to create persuasive presentations.

Why might I need Fulcrum's assistance?

Most companies in financial difficulty require advice to determine what went wrong and what needs to change. After a plan is developed, transactional assistance is needed to implement the most important decisions. Here is how we help:

  1. Troubled Company Restructuring - Unless the financial difficulty is entirely caused by a nonrecurring isolated event, a troubled company needs to restructure its operations to return to profitability. Usually, the underlying accounting records are in poor shape, depriving the organization of information needed to make intelligent decisions. Advice from experienced business people and accountants is almost always needed in this situation.
  2. Forensic Accounting and Fraud Auditing - Troubled companies frequently face allegations of fraud by insiders that creditors and/or trustees need to investigate. At the same time, accounting records are often in shambles. Forensic accountants work with less-than-desired records to ascertain what happened.
  3. Asset Monitoring for Secured Lenders - Secured lenders sometimes require on-site independent monitoring of inventory and cash collateral. This may include check and major purchase approvals, with the related determinations regarding alternatives to transactions that are not approved. This required accounting and auditing expertise from independent personnel.
  4. Interim Financial Management - In the darkest of times, qualified accounting personnel are nearly impossible to recruit. If needed, we can provide interim financial management.
  5. Fresh Start Accounting - Companies emerging from a bankruptcy require business and asset appraisals and other accounting adjustments to reflect the plan of reorganization. To have the necessary credibility with auditors, lenders and regulators, the financial statement conclusions must be supported by business appraisal conclusions.
  6. Solvency, Retrospective Solvency, and related Expert Testimony - Insolvency is a necessary ingredient for triggering avoidance power actions in a bankruptcy. Solvency opinions address whether a debtor, upon incurring debt from a leveraged transaction is insolvent or would be rendered insolvent (the balance sheet test), would be left with inadequate capital with which to engage in its business (the capital adequacy test), or would have cash flows insufficient to meet its current and prospective obligations as they became due (the cash flow / fixed charge coverage test). This analysis requires forecasting and corporate finance skills.
  7. Fraudulent Conveyance Determinations and related Expert Testimony - An acquisition of a financially distressed company for less than reasonably equivalent value or fair consideration may give rise to a claim that the transaction constituted a fraudulent conveyance on pre-transaction creditors. A solvency opinion or reasonably equivalent value opinion may facilitate consummation of a pending transaction, or defend/attack a past transaction. Appraisal skills are required to determine whether the transactions occurred at a reasonably equivalent value.
  8. Support of Plans of Reorganization - Successful plans required financial analysis to determine (i) the plan's feasibility, and (ii) the advisability of the proposed plan over liquidation or other alternatives. Appraisal and forecasting skills are needed for a proper and successful analysis.
  9. Asset Appraisals and Fairness Analyses - Business restructurings usually require sales of underutilized assets, and/or operations that will not be part of the reorganized company. Valuation expertise is needed to determine the prices that should be obtained for the assets and/or operations being sold. Professional appraisal input is usually also required to obtain court or lender approval of the transaction.