Real estate valuation occurs in a variety of forums and we often find ourselves playing “away games.” Recently, I assisted my partners in our Las Vegas office in a bankruptcy case in which the debtor – our client – owned a number of commercial properties. Las Vegas’ real estate market is one of the hardest hit areas of the country. I was brought in to assist in establishing the value of ten properties in the context of the bankruptcy proceeding. Several major lending institutions held mortgages on these properties including Wells Fargo, Bank of America and German America. Initially, the valuation “spread” – the difference between the parties’ alleged values of the various properties – was over $7 million. However, we were able to settle the valuation issue for half of the properties. As to the remaining five properties, we alleged that the aggregate value of the properties was $10,450,000. The lenders alleged it was $14,015,000. After three days of hearings, the Court ruled that the value was $11,000,000. Our client was very pleased with the results.
There were a number of interesting aspects of the case. First, it was important to understand the legal nuances of bankruptcy valuation. Whether you are litigating valuation in the context of eminent domain, tax assessment or any other area of the law, it is critical to understand the law in that area. It is also critical to understand the venue of the litigation including the judge, jury or panel that will be deciding the case. In this case, the Bankruptcy Judge, The Hon. Judge Bruce A. Markell, has extraordinary experience in the appraisal of real estate. Therefore, I made sure to tailor my case to his level of expertise.