Detailed Information

Cited 0 time in webofscience Cited 0 time in scopus
Metadata Downloads

도산절차에 있어서 재산 및 기업가치의 평가Valuation Issues in a Business Reorganization Case

Other Titles
Valuation Issues in a Business Reorganization Case
Authors
윤남근
Issue Date
2010
Publisher
고려대학교 법학연구원
Keywords
going concern value; liquidation value; discounted cash flow/DCF; comparable company analysis; comparable transaction analysis; 계속기업가치; 청산가치; 현금흐름할인법; 비교기업분석법; 비교거래분석법
Citation
고려법학, no.56, pp.613 - 657
Indexed
KCI
Journal Title
고려법학
Number
56
Start Page
613
End Page
657
URI
https://scholar.korea.ac.kr/handle/2021.sw.korea/134538
ISSN
1598-1584
Abstract
This article deals with valuation issues in bankruptcy cases. The Bankruptcy and Reorganization Law mandates that the case trustee and court-appointed inspector assess both the enterprise value and the asset-by-asset value of the debtor. The result of the valuation plays a critical role in many stages of a reorganization proceeding. There are two different approaches to valuation: the value of an individual property and the value of an enterprise as a whole. The issue of asset-by-asset valuation arises in deciding the amount of the secured claim or confirming a reorganization plan in a cram-down. A creditor whose debt is only partially secured has two claims: a secured claim measured by the value of its collateral and unsecured claim for the remainder. Also, a plan may be confirmed over a dissenting secured class, if it provides the class with the amount equal to the fair value of the collateral. In both of the above situation, this article concludes that the value of the collateral should be its fair market value, not the liquidation value. Enterprise value falls into three categories: going-concern value,liquidation value and asset value. There are several methods that are widely used to fix the going concern value: discounted cash flow analysis(DCF), comparable company analysis, comparable transaction analysis and so on. The Judicial Guideline for Reorganization Case Management (In Korean, “회생사건의 처리에 관한 예규”) provides that DCF be exclusively used. However, there is no justification that the Guideline prescribes any specific method or DCF is superior to other methods, so this part of the Guideline should be abolished. The Bankruptcy and Reorganization Law obliges the court to order the closure of a reorganization case when it finds that the liquidation value exceeds the going-concern value. In the absence of an actual sale, going-concern value is an estimated present value of the debtor's projected cash generation. As a result, its valuation is necessarily subjective and hypothetical. It is pointless that the law or state dictates the fate of a private business entity based on a simple comparison between the going concern value and the liquidation value. The Bankruptcy and Reorganization Law states that, when the debt exceeds the asset value of the debtor, the equity holders have no vote in the planning and the face value of the equity be depreciated to less than a half in the reorganization plan. This article concludes that the going concern value, not the asset value, should be compared with the debt, because going concern value is a business' enterprise value as a continuing operation.
Files in This Item
There are no files associated with this item.
Appears in
Collections
Graduate School > School of Law > 1. Journal Articles

qrcode

Items in ScholarWorks are protected by copyright, with all rights reserved, unless otherwise indicated.

Altmetrics

Total Views & Downloads

BROWSE