Valuation and Debt Capacity Assessment

Strategic decisions at the outset of a restructuring can often significantly influence the ultimate outcome. Gordian Group believes that a key part of the decision making process is in the determination of values as compared to the company's liabilities. In order to put decisions about the company's capital structure in the proper framework, Gordian Group quickly undertakes to determine views of:

• Values of each business unit in the public, private and merger markets

• Assessment of core v. non-core assets

• Potential values, over time, of each business unit with improvements in operations

• Wind-down or liquidation values for business units that have operational limitations

• Comparative values which could be achieved by the various constituencies in reorganization or sale versus current public and private trading prices, if any, for their securities

In order to evaluate optimal capital structures, Gordian Group also examines the debt capacity of the business. Key evaluations which are regularly performed include:

• Determinations of the senior debt capacity that can be obtained (either secured or unsecured) through formula-based facilities, cash flow loans or a combination thereof

• Assessments of the amount of junior debt that could be supported by the company including cash-pay instruments, deferred-interest securities or other structures

• Analyses of the amount of unused availability a company may need to meet contingencies and unexpected changes in circumstances