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Our extensive network includes top experts from academia and industry.

Our extensive network includes top experts from academia and industry.

David C. Smith

Virginia Bankers Association Professor,
Associate Dean for Center Development & Research,
McIntire School of Commerce,
University of Virginia

David C. Smith specializes in corporate finance and restructuring. He provides expert testimony in matters related to many areas of finance, including corporate valuation, solvency, bankruptcy, restructuring, and governance; distressed debt trading; securities valuation; bank lending relationships; private equity; and the financing and investment performance of pension, real estate, and hedge funds.

Professor Smith’s current research includes analyzing the economic importance of corporate credit agreements, investigating the restructuring of highly leveraged firms, documenting the impact of distressed debt trading on bankruptcy outcomes, and studying the influence of corporate contracts and law on the quality of corporate governance.

Before joining the University of Virginia, Professor Smith worked as an economist in the International Finance Division of the Federal Reserve Board. While at the board, he covered the Japanese and Chinese banking sectors and worked on issues related to international financial architecture. Before joining the Federal Reserve, Professor Smith spent five years teaching at the Norwegian School of Management in Oslo.

Professor Smith has published his research in leading academic journals, including the Journal of Finance, the Journal of Financial Economics, the Journal of Econometrics, and the Review of Financial Studies, and has presented his research at universities and conferences around the world. He has won several awards for his teaching. In 2019, the University of Virginia honored Professor Smith with a Collaborative Excellence in Public Service Award for his work on a ten-year retrospective project on the 2008 financial crisis.

Our extensive network includes top experts from academia and industry.

Stuart C. Gilson

Steven R. Fenster Professor of Business Administration,
Harvard Business School,
Harvard University

Stuart Gilson is an expert in corporate restructuring and valuation. He has deep expertise in bankruptcy and financial distress issues, credit and financial statement analysis, and corporate transactions—including business valuation in M&A settings.

Professor Gilson has provided expert testimony in numerous matters, including multiple trials. He has addressed such topics as corporate restructuring; asset and business valuation; M&A; solvency; fraudulent conveyance; and substantive consolidation. He has consulted on solvency and valuation issues in a variety of industries, such as education, energy (including alternative energy), finance, healthcare, insurance, retail, technology, and transportation.

Professor Gilson’s research and consulting focus on the operational, financial, and legal strategies that companies use to revitalize their business, improve performance, and create value. He is the author of the book Creating Value through Corporate Restructuring: Case Studies in Bankruptcies, Buyouts, and Breakups, which he developed from a class he has taught for the last twenty years in Harvard’s M.B.A. curriculum.

Professor Gilson has written more than seventy Harvard Business School case studies and teaching notes used in business schools throughout the world. He has also taught extensively in Harvard Business School’s Executive Education programs and received multiple academic research and teaching awards. Turnarounds and Workouts magazine has recognized Professor Gilson as one of the top ten outstanding bankruptcy academics.

Professor Gilson’s research is published in leading academic and practitioner journals and cited by national news media. His work has received several honors, including the prestigious Graham and Dodd Award from the CFA Institute. He was an associate editor of Financial Management and the Journal of Corporate Finance.

Professor Gilson has also served on the advisory and corporate boards of several for-profit and nonprofit organizations and has provided expert advice on bankruptcy law reform in the U.S. and internationally.

Our extensive network includes top experts from academia and industry.

Frederick G. Van Zijl

President, RVZ Strategic Advisors;
Former Managing Director, Fortress Investment Group;
Former Head of U.S. Leveraged Finance, Barclays Capital;
Former Managing Director, Goldman Sachs

Rick Van Zijl has more than thirty-five years of experience as a financial services professional. Mr. Van Zijl has held senior roles at leading global investment banks, where he led high-profile transactions. He also served as an investor at a major hedge fund. As an expert witness, he has addressed valuation, access to capital markets, solvency, and leveraged finance, among other issues. His industry experience includes financial institutions, industrials, media, quick service restaurants (QSR), retail, and telecommunications.

Mr. Van Zijl has arranged and invested in customized debt and equity structures to finance buyouts, growth, acquisitions, recapitalizations, and restructurings. He has underwritten scores of debt capital market transactions, and has been involved in all stages of debt issuance, including origination, structuring, and syndication. Mr. Van Zijl has deep experience with leveraged loans, high-yield bonds, bridge financing, and mezzanine and distressed debt. His experience includes leading the debtor-in-possession (DIP) financing for the Lehman Brothers bankruptcy and working on such notable restructuring transactions as Xerox and Solectron.

As president of RVZ Strategic Advisors, Mr. Van Zijl consults on topics related to private equity and credit financings in the insurance, lease finance, and asset management industries. Previously, as a managing director at Fortress Investment Group, he evaluated and underwrote investment opportunities in distressed assets, in the specialty finance, media, and infrastructure industries.

Mr. Van Zijl founded and headed the leveraged finance business at Barclays Capital, where he oversaw all noninvestment-grade credit origination and private equity and credit investing in the United States. In that role, he also chaired the firm’s Americas Credit Committee and served on the Americas Investment Banking and Global Investment Committees. Before joining Barclays, Mr. Van Zijl was a managing director at Goldman Sachs, with responsibility for all due diligence, structuring, underwriting, and approval processes for subject transactions in the leveraged finance group.

Bankruptcy and Financial Distress Capabilities

Cornerstone Research has experience in fraudulent transfer litigation brought by bankruptcy trustees and creditors of distressed companies. We have analyzed whether:

  • The company received a reasonably equivalent value in the transaction at issue.
  • The company was insolvent on the date of the transaction at issue.
  • The company becomes insolvent as a result of the transaction at issue.
  • The transaction left the company with an unreasonably small amount of capital.
  • The company incurred debts beyond a company’s ability to repay in connection with the transaction.

We have also analyzed whether:

  • A single counterparty had excessive influence on a company’s decision making.
  • Boards of directors received sufficient information to make decisions.
  • Risk management efforts provided inadequate protection against a counterparty bankruptcy.
  • The company made adequate disclosures related to possible financial distress.

 

Our experience includes a variety of securities and ERISA litigation related to bankrupt companies and distressed securities. We have addressed the oversight role provided by pension plan trustees and the roles of other parties involved in pension plan advice and administration.

Our staff have addressed the full spectrum of lender issues arising during and after bankruptcy proceedings, including challenges by unsecured creditors, equitable subordination motions, liquidation financing, the fiduciary duty of trustees and receiverships, bond defaults, loan foreclosures, and rating downgrades. We have valued loan portfolios on a historical basis and evaluated lenders’ risk positions, among other sophisticated fixed-income analyses..

In several deepening-insolvency matters we have worked on, plaintiffs have alleged that defendants’ misconduct delayed the bankruptcy filing, during which time the corporation’s debt continued to mount. We have applied rigorous approaches grounded in corporate finance theory and analyses of facts and circumstances in these cases.

Companies operating in the zone of financial distress present unique valuation challenges because the future value of their securities is much more uncertain than those of companies not operating in a zone of financial distress. In addition, future values of securities may follow nonlinear patterns that can make traditional valuation approaches unreliable. In many such cases, we use option-pricing approaches to arrive at estimates of value.

Valuing complex assets with option-like characteristics often requires using computer-intensive simulation methods instead of traditional formulas such as the Black-Scholes model. Cornerstone Research has worked with experts to build complex valuation and damages models for a range of assets with option-like characteristics.

Cornerstone Research has investigated whether a corporate parent and subsidiary have established themselves as genuinely separate entities. This work has included analyses of whether and to what extent assets and business functions were comingled and comparisons of how financial statements represented transactions by and between the entities. Our staff have also assessed how the parent and its subsidiary were financed historically, and how their capital structures evolved over time.

We have consulted on litigation surrounding distressed financial institutions, including suits and seizures by regulators. We have analyzed the causes of these firms’ failures, assessing the extent to which losses resulted from the companies’ own strategies and procedures versus industry and macroeconomic events. We have also conducted studies on whether regulators and management would have acted differently in the absence of various factors. And we have calculated the value of failed firms’ assets and liquidity positions at different points in time.

We have assessed whether and to what extent a company’s losses or failures result from any actions by auditors. These analyses have included identifying possible weaknesses in processes for internal controls, whether delayed or prolonged audits affected the firm’s performance, and how different actions by the auditors may have affected the decision making of managers, boards of directors, shareholders, or creditors. Our work has also included matters of compliance with different accounting standards, along with regulatory proceedings related to auditing.

Featured Cases

Featured Publications

7 September 2022

Large Corporate Bankruptcy Filings Continue to Decrease through First Half of 2022

Most industry groups saw bankruptcy filings decline from mid-2020 pandemic highs.

6 September 2022

Trends in Large Corporate Bankruptcy and Financial Distress—Midyear 2022 Update

Following the spike in large corporate bankruptcy filings triggered by the COVID-19 pandemic, filings in 2021 and the first half of 2022 fell to le...

30 August 2022

Trends in Large Corporate Bankruptcy and Financial Distress

This report examines trends in Chapter 7 and Chapter 11 bankruptcy filings.

11 March 2022

René Stulz Honored in Special Edition of Journal of Applied Corporate Finance

Professor Stulz’s articles are republished in a special edition of the journal, which highlights his more than four decades of research on globaliz...

28 December 2021

Cornerstone Research Again Named “Go-To Thought Leader”

National Law Review recognizes Cornerstone Research’s corporate bankruptcy law content for its “excellence in legal thought leadership” in 2021.

24 August 2021

Trends in Large Corporate Bankruptcy and Financial Distress—Midyear 2021 Update

The COVID-19 pandemic set off an increase in corporate bankruptcy filings not seen since the financial crisis.

23 August 2021

Bankruptcy Filings Down in 1H 2021 after a Pandemic-Driven Spike in 2020

Large corporate bankruptcy filings reached near-record highs in 2020, but returned to lower levels in the first half of 2021 as the economic recove...

29 December 2020

Cornerstone Research Named 2020 “Go-To Thought Leader”

National Law Review recognizes Cornerstone Research’s securities law content for its “excellence in legal thought leadership.”

24 December 2020

Accounting Rules May Spark Next Wave Of Bankruptcy Suits

The authors discuss how certain accounting and auditing standards implemented after the Financial Crisis could affect the next wave of trustee and ...

19 November 2020

The Potential Impact of COVID-19-Induced Volatility on Business Valuation in M&A and Bankruptcy Litigation

The authors assess the impact of COVID-19-induced volatility on company valuations in this Law360 article.

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