Case Study

Question 1

What was the purpose of the valuation

Answer 1

Required to assist in the determination of the strategic decisions concerning the Company assets.

Question 2

What was the bases of valuation

Answer 2

Market value

Plus the special assumption/assumption

Question 3

What method of valuation was used

Answer 3

Comparable method

Question 4

How did you find comparable evidence

Answer 4

I undertook research on the internet looking at sold prices through auction platforms and advertised prices through dealer sites.

Question 5

How did you record your comparables

Answer 5

Details are printed or link saved to the file.

Question 6

What comparable analysis did you undertake?

Answer 6

Having recorded multiple comparables I analysed the comparables on a excel spreadsheet identifying the relevant differences and making the relevant adjustments.

Question 7

What adjustments did you account for in your comparable analysis?

Answer 7

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?

Question 8

Does the RICS provide guidance on comparable evidence/

Answer 8

Yes… Comparable evidence in real estate valuation 1st edition, October 2019 - guidance note

Question 9

How many lots did the auction consist of

Answer 9

150 Lots

Question 10

How did you organise the lots

Answer 10

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

Question 11

Which assets were excluded from the valuation through the assumption in option 2

Answer 11

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.

Question 12

How much did the auction achieve

Answer 12

£42,000 plus plus

Question 13

Why do you believe the auction was so successful

Answer 13

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.

Question 14

What marketing did you undertake

Answer 14

I produced adverts for printed machinery sales publications - IEM
Various dedicated email shots
Website advert

Question 15

Did you agree a marketing budget with the client

Answer 15

Yes, I advised the client of the advised marketing activites and the cost which was agreed by the client.

Question 16

You advised that you carried out a conflict of interest check, how did you do this?

Answer 16

I checked on our internal case database for any prior involvement and also asked around the office as we have a very small office.

Question 17

What is a conflict of interest?

Answer 17

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

Question 18

What is a CVL

Answer 18

It’s the process of the directors of the company choosing to liquidate the company.

Question 19

What Health & Safety aspects did you consider on site

Answer 19

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

Question 20

So state you did a risk assessment, what is a risk assessment

Answer 20

Its a document that identifies hazards, evaluates the effectiveness of current measures, and what measures can be introduced to reduce and manage the risks

Question 21

What hazards did you identify and how did you manage them

Answer 21

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.

Question 22

What information did you gather with regards to disposal considerations

Answer 22

Are the assets secure - security at the site.

Current property considerations regarding rent

Question 23

Can you tell me the legislation in regards to ROT

Answer 23

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)

Question 24

Can you tell me the legislation in regards to Health & Safety

Answer 24

Health & Safey Act 1974

is the primary legislation covering occupational health and safety in the United Kingdom.

Question 25

What in your terms would allow a sale prior to the close of the auction?

Answer 25

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.

Question 26

What was the limitations of the advice provided?

Answer 26

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.

Question 27

What basis did you provide your advice on the ROT claim?

Answer 27

From my knowledge of relevant legislation, the insolvency service ‘technical manual’, relevant case law and experience.

Question 28

ROT why did you advise that the claim should be accpeted?

Answer 28

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.”