Liquidation Analysis. The Purchaser determined that the fair value of each Unit falls within a range of $508 to $640 based upon the liquidation analysis described below. The Purchaser calculated this range on the basis of its estimate of the proceeds that could be realized from the sale of the Properties and the Partnership's other assets, less mortgage debt and other liabilities. To determine the prices at which the Properties could be sold by the Partnership, the Purchaser applied a capitalization rate of 9% to the net cash flow expected to be generated by the Properties in 1999, adjusted to reflect factors that a third party purchaser would consider relevant in evaluating the purchase of the Properties, and then subtracted amounts related to necessary capital improvements (i.e., the Capital Plan) and transaction costs associated with the purchase of the Property. In deriving the net cash flow attributable to the Properties, the Purchaser made the following adjustments to 1999 budgeted cash flow: (a) an increase to current gross rents to reflect varying growth rates of between 1.5% and 3% per annum, offset by vacancy and bad debt expense at a rate of 7%; and (b) adjustments to expenses associated with the Properties following a sale to a third party, including insurance costs, varying levels of replacement reserves, taxes and management fees. This resulted in estimated aggregate cash flows for the Properties of between $3,753,000 and $4,065,000, against which the Purchaser applied a capitalization rate of 9% and deducted (a) estimated closing costs associated with such sales of 3% and (b) the estimated cost of the Improvements of $10,000,000 to arrive at an aggregate gross value of the Properties of between $30,467,000 and $33,828,000. The addition of approximately $1,614,000 of cash and other assets of the Partnerships, less $19,205,000 of mortgage debt and other liabilities associated with the Partnership, resulted in a value range for the Units of between $508 and $640. Projections are by their nature speculative and no assurance can be given that a projection will accurately reflect the rental income actually achieved. A capitalization rate is a rate of return commonly applied by buyers of real estate to property income to determine the present value of income property. The choice of capitalization rate is subjective and based on, among other things a buyer's evaluation of a property's location and condition. The lower the capitalization rate utilized, the higher the valu...
Liquidation Analysis. If reasonably requested by the Purchaser Representative, the Company shall prepare or cause to be prepared any liquidation analysis, plan feasibility analysis or other economic analysis that may be required pursuant to Section 1129 of the Bankruptcy Code.
Liquidation Analysis. Pursuant to Section 1129(a)(7) of the Bankruptcy Code (often called the “Best Interests Test”), holders of Allowed Claims and Equity Interests must either (a) accept the Plan or (b) receive or retain under the Plan property of a value, as of the Plan’s assumed Effective Date, that is not less than the value such non-accepting holder would receive or retain if the Debtor was liquidated under Chapter 7 of the Bankruptcy Code (“Chapter 7”). In determining whether the Best Interests Test has been met, the first step is to determine the dollar amount that would be generated from a hypothetical liquidation of the Debtor’s assets under Chapter 7. The Debtor has prepared this hypothetical Liquidation Analysis (the “Liquidation Analysis”) in connection with the Disclosure Statement. The Liquidation Analysis reflects the estimated cash proceeds, net of liquidation-related costs, that would be available to the Debtor’s creditors if the Debtor was to be liquidated under Chapter 7 as an alternative to continued operation of the Debtor’s business and reorganization under the Plan. Accordingly, asset values discussed herein may be different than amounts referred to in the Plan. The Liquidation Analysis is based upon the assumptions discussed herein and in the Disclosure Statement. All capitalized terms not defined in this Liquidation Analysis have the meanings ascribed to them in the Disclosure Statement. UNDERLYING THE LIQUIDATION ANALYSIS ARE NUMEROUS ESTIMATES AND ASSUMPTIONS REGARDING LIQUIDATION PROCEEDS THAT, ALTHOUGH DEVELOPED AND CONSIDERED REASONABLE BY THE DEBTOR’S MANAGEMENT ARE INHERENTLY SUBJECT TO SIGNIFICANT BUSINESS, ECONOMIC, REGULATORY AND COMPETITIVE UNCERTAINTIES AND CONTINGENCIES BEYOND THE CONTROL OF THE DEBTOR AND ITS MANAGEMENT. ACCORDINGLY, THERE CAN BE NO ASSURANCE THAT THE VALUES REFLECTED IN THE LIQUIDATION ANALYSIS WOULD BE REALIZED IF THE DEBTOR WAS, IN FACT, LIQUIDATED, AND ACTUAL RESULTS COULD MATERIALLY DIFFER FROM THE RESULTS SET FORTH HEREIN.
Liquidation Analysis. The Borrower and the Guarantors hereby agree to (a) permit PricewaterhouseCoopers LLP ("PWC"), on behalf of counsel to the Agent, to formulate a liquidation analysis of the Borrower and the Guarantors and (b) cooperate with PWC in such liquidation analysis. The Borrower and the Guarantors acknowledge, agree and confirm that (a) any reports or analyses generated by PWC are not property of the Borrower or any Guarantor, (b) none of the Borrower and the Guarantors shall assert any claim to any such report or analyses and (c) pursuant to Section 15.1 of the Credit Agreement, the fees and expenses of PWC are for the account of the Borrower. So long as no Event of Default has occurred and is continuing, the Agent agrees that the fees of PWC for the liquidation analysis shall not exceed the total sum of $130,000 plus reasonable expenses.
Liquidation Analysis. Overview:
