Case Study Flashcards
What was the purpose of the valuation
Required to assist in the determination of the strategic decisions concerning the Company assets.
What was the bases of valuation
Market value
Plus the special assumption/assumption
What method of valuation was used
Comparable method
How did you find comparable evidence
I undertook research on the internet looking at sold prices through auction platforms and advertised prices through dealer sites.
How did you record your comparables
Details are printed or link saved to the file.
What comparable analysis did you undertake?
Having recorded multiple comparables I analysed the comparables on a excel spreadsheet identifying the relevant differences and making the relevant adjustments.
What adjustments did you account for in your comparable analysis?
Date of the transaction
Is it a completed transaction or offered for sale?
What method of sale is it being offered through?
Does it come with a warranty?
YOM of the machine, condition?
Does the RICS provide guidance on comparable evidence/
Yes… Comparable evidence in real estate valuation 1st edition, October 2019 - guidance note
How many lots did the auction consist of
150 Lots
How did you organise the lots
Assets were lotted with the more valuable assets at the begining, in a walk round order and keeping type of assets together as follows
Heavy machinery together
Power tools together
Stock together
Office furniture together
Which assets were excluded from the valuation through the assumption in option 2
Large 4 bag dust extraction unit
Compressor (Housed in an enclosed room)
Spray booth
Removal of the units would have caused damage to the property and removal would have been inexcess of their value. Reserves were placed on the auction which were not met. Sold to tenant moving into the premises.
How much did the auction achieve
£42,000 plus plus
Why do you believe the auction was so successful
Our marketing reached end users rather than dealers
Bidding wars on a number of big ticket items
‘Auction fever’ bidders paying unexplainable amounts as they get caught up in the auction process.
What marketing did you undertake
I produced adverts for printed machinery sales publications - IEM
Various dedicated email shots
Website advert
Did you agree a marketing budget with the client
Yes, I advised the client of the advised marketing activites and the cost which was agreed by the client.
You advised that you carried out a conflict of interest check, how did you do this?
I checked on our internal case database for any prior involvement and also asked around the office as we have a very small office.
What is a conflict of interest?
A situation where there may be an actual, perceived or potential risk that the professional judgement of an RICS-regulated firm or member will be compromised when undertaking an assignment. A member is not able to act with transparency or independently
What is a CVL
It’s the process of the directors of the company choosing to liquidate the company.
What Health & Safety aspects did you consider on site
I firstly considered my safety on site through the inspection.. this included wearing the approriate PPE and having my digital diary up to date.
I considered safety considerations of the machines. Machinery having relevant guards.
Safety of the site for carrying out a sale of assets, trip hazards, machines being switched on
So state you did a risk assessment, what is a risk assessment
Its a document that identifies hazards, evaluates the effectiveness of current measures, and what measures can be introduced to reduce and manage the risks
What hazards did you identify and how did you manage them
trip hazard from saw dust on floor covering items
Tidied site to reduce risk
Machines being turned on during inspection by an incompetent person, machines turned off at isolator and only turned on when supervised by a competent person.
What information did you gather with regards to disposal considerations
Are the assets secure - security at the site.
Current property considerations regarding rent
Can you tell me the legislation in regards to ROT
Sale of Goods Act 1979 - Section 17
The Insolvency Act 1986
Sections: 234(3) - seizure and disposal of property (company)
234(4) - liability of office holder (company)
287(4) - liability of official receiver (bankruptcy)
304(3) - limit on liability (bankruptcy)
Can you tell me the legislation in regards to Health & Safety
Health & Safey Act 1974
is the primary legislation covering occupational health and safety in the United Kingdom.
What in your terms would allow a sale prior to the close of the auction?
Our terms and conditions of sale state offered for online auction unless sold prior and contract with the buyer is not made until fall of the hammer, anything prior to this is an offer to purchase.
What was the limitations of the advice provided?
I’m not a legal professional and my advice on the ROT claim may differ from the reality of litigation.
My estimations in sale costs are estimations.
What basis did you provide your advice on the ROT claim?
From my knowledge of relevant legislation, the insolvency service ‘technical manual’, relevant case law and experience.
ROT why did you advise that the claim should be accpeted?
I considered there was sufficient reasoning to justify acceptance. A narrow view at the formalities of the claim have come to a different decision however I believe to not factor in the potential litigation behind challenging the decision would have been bad advice and once this was considered their was sufficient reasoning for acceptance. My advice gave a professional opinion for the client to make an informed decision on how to proceed.
Thomas -v- Albutt (2015) case which refers to a duty owed by a barrister (and lawyers generally) to warn about the risks of litigation. Clients, I know, want two inconsistent things. They want confident advice on which they can act, and they want cautionary advice about the risks of doing so. It is a solicitor’s unhappy lot to have to try to satisfy both requirements simultaneously.”
