Our client’s need

A Long Island-based importer of toys and hobby goods was purchased in April 2007 in a leveraged buy-out. By 2010, the company was involuntarily placed into Chapter 11 bankruptcy by its creditors, and the case subsequently converted to a Chapter 7. The Chapter 7 trustee subsequently brought fraudulent transfer and preference claims against the sellers of the company and company insiders.

Baker Tilly solution

Baker Tilly was retained by the Chapter 7 trustee to prepare three expert reports setting out solvency analyses at various dates, including at the buy-out date, in support of the trustee’s efforts to recover alleged fraudulent transfers and preference payments. We also provided extensive support to the trustee’s counsel to assist in deconstructing and understanding the buy-out transaction; to provide questions and areas of inquiry for the depositions of company insiders, the company’s outside accounting personnel, and the opposing expert; and to provide testimony at deposition.  

Results achieved

Using our solvency analyses, the trustee and his counsel were able to settle claims against the sellers and company insiders resulting in recoveries to the estate.

For more information on this topic, or to learn how Baker Tilly valuation in disputes specialists can help, contact our team.