Problems with Solvency Tests

Solvency disputes often define the outcome of high-stakes litigation in bankruptcy, fraudulent transfer, and preference matters.

My work—spanning academic research, expert testimony, and strategic litigation roles—helps litigation teams, investors, in-house counsel, and insurers navigate these complex issues with clarity.

HOW I CAN ADD VALUE

Evaluate solvency tests and claims of fraudulent conveyance

Analyzing market evidence and predictions of corporate failure

Identifying and vetting testifying experts

SELECTED PUBLICATIONS

Simple Market Evidence Predicts Corporate Bankruptcy Better Than Complex Models (2025, working paper)

The Altman Z Score Does Not Predict Bankruptcy, AIRA Journal, 33(3), 32-34 (2020).

Simple Insolvency Detection for Publicly-Traded Firms, Business Lawyer, Vol 74(3), 723-734 (2019).

Debt and Insolvency, Review of Banking and Financial Law Vol. 38, 363-388 (2019).

Positive Equity Prices with Insolvency Under Legal Solvency Tests, 23 Journal of Forensic Economics, Vol 23, 63-70 (2018).

Solvency Tests, Business Lawyer, Vol. 62, No. 3, 983-1006 (2007). Cited by Teleglobe USA, Inc. v. BCE Inc. (In re Teleglobe Communs. Corp.), 392 B.R. 561, 602 (Bankr. D. Del. 2008) (Walrath, J.).

Deepening Insolvency, The Journal of Corporation Law, Vol. 30, No. 3, pp. 465-500 (2005). Cited by In re Citx Corp., 448 F.3d 672 (3d Cir. 2006); Official Comm. of Unsecured Creditors of Verestar, Inc. v. Am. Tower Corp. (In re Verestar, Inc.), 343 B.R. 444 (S.D.N.Y. 2006); OHC Liquidation Trust v. Credit Suisse First Boston (In re Oakwood Homes Corp.), 340 B.R. 510 (Bankr. D. Del. 2006); Christians v. Grant Thornton, LLP, 733 N.W.2d 803 (Minn. Ap. 2007); In re Parmalat Sec. Litig., 501 F. Supp. 2d 560 (S.D.N.Y. 2007); Schnelling v. Crawford (In re James River Coal Co.), 360 B.R. 139 (Bankr. E.D. Va. 2007).

Incomplete Financial Contracts and Non-Contractual Legal Rules: The Case of Debt Capacity and Fraudulent Conveyance Law, Journal of Financial Intermediation, Vol. 9, pp. 169-183 (2000).

PRIOR TESTIMONY AS AN EXPERT WITNESS

While I now focus my work on helping others develop economic evidence as a counseling lawyer, I have experience in dealing with these issues as an expert witness. There is no substitute for understanding the problem an expert has at trial on solvency issues than in having developed one’s reports and given the testimony in deposition and trial. My assignments included:

In Re: Sanchez Energy Corporation, et. al., 19-34508 (Bankr. S.D. Tex.). Expert retained by Ad Hoc Group of Senior Secured Noteholders and DIP Lenders and DIP Agent concerning the value of a Section 550(a) cause of action related to lien avoidance at the Plan effective date for purposes of allocation post-effective date equity in the reorganized debtor. Deposition (February 14, 2023) and evidentiary hearing (April 19, 2023).

Intelsat S.A., et al., 20-32299 (KLP) (Bankr. E.D. Va). Expert retained by Jackson Crossover Group and the Jackson Unsecured Trustee regarding solvency analysis of Intelsat S.A. Deposition (November 10, 2021) and confirmation hearing (December 13, 2021).