Willamette Management Associates analysts perform valuations of businesses, business ownership interests, debt and equity securities, intangible assets and intellectual properties, and special purpose properties. We routinely perform these valuations for the following purposes:
Bankruptcy and Reorganization
We were retained by legal counsel for the secured creditors' committee. Our assignment was to estimate the fair market value of the total equity of an oil pipeline company DIP. Based on both the discounted cash flow and the guideline publicly traded company valuation methods, we valued the DIP equity at a positive $50 million. This positive equity value supported the creditors' proposed plan of reorganization. We testified in U.S. Bankruptcy Court on behalf of the creditors' committee, and the case settled favorably before the conclusion of the trial.
In U.S. Bankruptcy Court, we testified for our client, the secured creditors' committee, as to the fair market value of a Florida residential real estate developer. One dispute in this bankruptcy involved the proposed plan of reorganization. Specifically, the dispute related to the value of the DIP business enterprise on a going-concern basis versus the value of the DIP business enterprise on an orderly liquidation basis.
ESOP Transactions and ERISA Compliance
A regional grocery store chain formed an employee stock ownership plan (ESOP). The ESOP purchased 100 percent of the employer company common stock from the founding family shareholders. We provided a fairness opinion to the ESOP institutional trustee, opining that the ESOP was not paying more than adequate consideration for the employer company stock.
Fair Value Accounting and Financial Reporting
We recently performed a purchase accounting allocation for a Fortune 500 defense contractor. We concluded the fair value of the acquired company's working capital, real estate, tangible personal property, identified intangible assets, and goodwill. We also concluded the fair value of the total purchase consideration, including an analysis of the contingent future earn-out payments.
We recently performed a long-lived asset impairment study (and the related asset fair value appraisal) for a Fortune 500 client in a capital-intensive manufacturing industry. This engagement included impairment analyses of tangible assets (e.g. manufacturing equipment and real estate) and of intangible assets (e.g., trademarks, patents, and licenses).
We recently valued executive/employee stock options for a substantial closely held corporation for fair value accounting purposes. We valued the compensation elements of all of the corporation options, warrants, grants, and rights. Using all allowable option pricing models, we estimated the fair value of the company's share-based compensation.
We recently performed the fresh-start accounting fair value analysis of a national retail chain. The client was emerging from bankruptcy, and the client needed to restate the reorganized company assets and liabilities at fair value.
Financing Securitization and Collateralization
Sample Engagements +
For a publicly traded energy company, we valued electric generation, distribution, and transmission facilities—both domestically and internationally. These facilities were used as collateral to secure public debt offerings.
For a major financial institution, we valued numerous industrial and commercial properties that were used as collateral for sale/leaseback transactions.
Forensic Analysis and Expert Witness Testimony
We were retained by legal counsel representing the Pennzoil Corporation board of directors to provide an expert opinion and expert testimony with regard to the acquisition of Pennzoil by Shell Oil. A dissenting shareholders appraisal rights action was filed by several former Pennzoil shareholders. The plaintiffs claimed, among other allegations, that the Pennzoil board accepted a price below the fair value of the shares when it ratified the proposed transaction. The agreed upon price-$22 per share, or approximately $1.7 billion-produced a total Pennzoil acquisition value of approximately $3 billion. We concluded that the $22 per share price accepted by the Pennzoil board was a fair price, based on our independent fair value conclusion of $21.41 per share. The dissenters claimed that the fair price was $34.26 per share. After a three-week trial, the jury ruled in favor of the Pennzoil board of directors, agreeing with us that the transaction price was fair.
We were retained by legal counsel in a dissenting shareholder appraisal rights case on behalf of a company that operates a one-mile racetrack. The racetrack hosts two annual NASCAR Winston Cup Series races, along with other motor sports events. Our analyst provided expert testimony in state court as to the fair value of the subject company equity. The court accepted our fair value conclusion with no material adjustment.
Pacific Guardian Life Insurance Company was majority owned by a Japanese financial services institution. Through the implementation of a reverse stock split, the Japanese parent corporation cashed out all of the minority stockholders. Certain stockholders exercised their dissenting shareholder appraisal rights. We estimated the fair value of the Pacific Guardian stock in support of the parent company's cash out price. And, we provided expert testimony in state court in support of our fair value appraisal.
We were retained by the U.S. Department of Labor (DOL) to provide independent financial adviser services related to an ESOP sponsor company. An issue in the dispute related to the fair market value of the common stock of a printing equipment distributor employer corporation. Over the course of approximately 18 months, the sponsor company operations failed. During that period, the employer corporation made distributions to the key management/controlling shareholders. The ESOP owned approximately 40 percent of the outstanding employer stock. On audit, the DOL questioned (1) the amount of the management distributions and (2) the most recent employer stock valuation prepared prior to the discontinuation of the company operations. We advised the DOL in its negotiations leading to a successful settlement of the dispute.
Management Information and Corporate Planning
For a nanotechnology IP development company, we identified various trade secrets and other intellectual property. We developed a plan for our client to transfer its IP to an off-shore subsidiary and to license back the IP for an arm's length price (ALP) royalty rate. In addition, we developed a plan to allow the client to outbound license the IP to several multinational businesses from its IP holding company subsidiary.
Not-for-Profit Entity Transactions
For not-for-profit hospital clients, we have opined on the fairness of the purchase price for purchases of medical practices, dialysis centers, urgent care centers, ambulatory surgery centers, diagnostic imaging facilities, and other health care businesses and practices. These fair market value valuations were intended to provide comfort to the hospitals with respect to excess benefits, private inurement, and other regulatory issues.Sample Engagements +
We prepared a fairness opinion related to a not-for-profit university complex purchase of the assets and business structure of a for-profit college. This fair market value valuation was intended to provide comfort to the not-for-profit buyer's board of directors with respect to private inurement considerations.
Taxation Planning and Compliance
We provided valuation services to a professional basketball franchise owner as part of a complex estate plan and business succession plan. To assist our client with his overall estate planning objectives, we estimated the fair market value of both the NBA franchise and a partial ownership interest in the NBA franchise.
We were retained by tax counsel representing the estate of a large shareholder in a national media company. We estimated the fair market value of an approximately 10 percent block of the outstanding common stock. This company operated in the following industries: newspaper publishing, cable television, and book publishing. The fair market value of the estate's interest was approximately $50 million. Our stock valuation was audited by the Internal Revenue Service, and the Service accepted our valuation without any material changes.
We were retained to conduct a purchase price allocation for a major consumer products manufacturer. The transaction was structured as a taxable purchase of assets. As part of the purchase price allocation, we identified and valued the following Section 197 intangible assets: (1) trademarks and trade names, (2) customer relationships, (3) proprietary technology and technical documentation, (4) supply contracts, (5) computer software, (6) trained and assembled workforce, (7) licenses and permits, (8) product formulations and trade secrets, and (9) goodwill.
We estimated the fair arm's-length price (ALP) of the trademarks and trade names and the patterns and designs for an upscale women's fashion designer. The domestic corporation owner/operator transferred this intangible property to an offshore entity. The intangible property was licensed to the domestic parent corporation and to affiliated manufacturing entities in various countries.
We were retained by a leading oil and gas exploration and production company located in eastern Texas. The purpose of the engagement was twofold. First, we assisted in the structuring of a newly formed management services company. The services company was created to provide management, administration, and other services to the legacy operating company. As part of this structuring, we estimated the fair ALP for the services to be performed by the services company. Second, we estimated the fair market value of an ownership interest in the operating company, following the restructuring, for gift tax and estate planning purposes. Our valuation included an analysis of the operating company's oil and gas properties, related production equipment, and investments in other privately held ventures.
We valued the exempt (from property tax) intangible assets of a major Texas Gulf Coast oil refinery. At trial, we testified as to the fair market value of proprietary technologies, computer software, engineering drawings and technical documentation, licenses and permits, contracts and contract renewals, and a trained and assembled workforce.
For an electric generation facility in New York, the state property tax authority assessed the property based on a recent acquisition price. Our client was the corporate acquirer, a publicly traded energy company. We valued the intangible assets of the acquired electric generation facility, including power purchase and sale contracts, environmental credits, and operating manuals and procedures. After a review of our valuation, the assessment authority reduced the value of the taxable unit by the value of these intangible assets.
We quantified overall unit value adjustments for a centrally assessed telecom company due to functional (including technological) and external (including economic) obsolescence. These obsolescence analyses include inutility analyses, excess operating cost analyses, excess capital cost analyses, and fair return on investment analyses. In addition, we provided expert testimony related to these functional and economic obsolescence adjustments.
We performed the unit valuation of a centrally assessed Class I railroad. This engagement included the valuation of the exempt intangible assets included in the railroad overall unit value.
Transaction Fairness, Solvency, and Other Financial
When one public telecom company acquired another public telecom company in a highly levered transaction, we provided the solvency opinion. This solvency opinion provided comfort to the boards of directors of both public corporations.
Transaction Pricing and Structuring
For a medical device manufacturer going through an ownership transition, we designed several classes of debt and equity securities. Based on this transaction structure, all transaction participants—the general employee, management, and private equity buyers, and the selling shareholder and mezzanine financing sources—received securities that satisfied their investment objectives. Although complex, this deal structure allowed the transaction to proceed to closing.
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