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Judge Allan Gropper's opinion

Judge Allan Gropper's opinion

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Judge Allan Gropper's opinion in the bankruptcy case of Tronox v. Kerr-McGee, et al.
Judge Allan Gropper's opinion in the bankruptcy case of Tronox v. Kerr-McGee, et al.

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Published by: DealBook on Dec 16, 2013
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12/28/2013

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Plaintiffs’ insolvency expert, Prof. Newton, determined Tronox’s business enterprise

value (“BEV”) as of the date of the IPO, November 28, 2005, to be $1.03 billion. Prof. Fischel,

100

See text at n. 94.

101

There was little dispute about the size of Tronox’s “Other Liabilities,” which Fischel calculated as $803 million.
These included the Term Loan and Senior Subordinated Notes ($550 million), Unfunded and Underfunded Pension
and OPEB liabilities (Fischel used the amount of $185.5 million), and Tax, Restructuring Reserve and Workers
Compensation and “Other” Liabilities (Fischel used a total of $67.5 million). Fischel Updated Report Ex 2800.1, Ex.
M, p. 9 of 44.

09-01198-alg Doc 622 Filed 12/12/13 Entered 12/12/13 16:30:01 Main Document
Pg 114 of 166

115

Defendants’ expert, used the same three valuation approaches to obtain a BEV of $1.7 billion.

The three approaches are: (i) a discounted cash flow analysis; (ii) a comparable company

analysis; and (iii) a comparable transaction analysis. These are standard approaches that have

been used in many cases, and they follow certain well-trod paths. In re Granite Broadcasting

Corp., 369 B.R. 120, 143 (Bankr. S.D.N.Y. 2010) citing, inter alia, Peter V. Pantaleo and Barry

W. Ridings, Reorganization Value, 51 BUS. LAW 419 (1996). We will first analyze the

respective expert opinions, and then their conclusions.102

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