Valuations: the linchpin of effective restructuring
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2023-07-14
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en
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To mitigate the resulting loss of value (and jobs), the Dutch Scheme was introduced in the Netherlands. The Dutch Scheme allows the court to declare a restructuring plan binding for all money providers. The preconditions for plan confirmation rely heavily on business valuations. Estimation of these values is complex. Increasingly so since no valuation framework exists that considers the particularities of the Dutch Scheme. Therefore, this study analyses which valuation methods are available to estimate these respective values, and what the implications are from selecting a particular approach.
Ultimately, the liquidation value constitutes the highest possible value in case of bankruptcy. This requires determining the possible sale scenarios and estimating their proceeds. The reorganization value is the total value available for distribution under all money providers eligible to vote on the plan. This value must be estimated based on the assumption that the company will continue to operate and distress is resolved.
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Faculteit der Managementwetenschappen