How Asset Valuation and Appraisal Really Work (or Better than Rochefort on Midway)
Have you recently wondered how asset valuation or appraisal works? Surely over the last three years you may have pondered one of these:
- How much value did a contractor's work add to a piece of property?
- How much is collateral worth? Should a borrower be required to fund more money to restore a loan's minimum debt-to-equity balance? How much money?
- How much is a loan, or portfolio of loans, worth? How did they decide how likely a borrower, or a bunch of borrowers put together, is to default?
- What is "indubitably equivalent value (PDF)" for an asset under the Bankruptcy Code?
Maybe the answer lies in the movie Midway? It was a favorite of my brother and me when we were kids - lots of ships and airplanes shooting each other up. But watching it on TV recently I noticed a piece of dialogue that went over the heads of two grammar school boys. It's between the fictional Captain Matt Garth (Charlton Heston) and cryptanalyst, Commander Joseph Rochefort (Hal Holbrooke). They're talking about breaking Japanese naval codes early in 1942. Could you hear the same exchange with MBAs or analysts in the past week, or decade?
"Analysis" by Rochefort and his team actually succeeded in cracking critical parts of the Japanese code, playing a pivotal role in Second Word War. Are contemporary analysts and appraisers as successful today?
Construction Law Today is a legal blog about construction contracts, disputes, finance, and the people whose job it is to deal with them.
