125 Old Broad Street



Saltri III Ltd v MD Mezzanina SA (and others)

Expert for the Claimants

Tim Giles


Read full decision here


In the course of a dispute heard at the English High Courts  – Saltri III Ltd v MD Mezzanina SA (and others) – Tim Giles gave evidence on the value of the Stabilus car components business prior to its restructuring in 2010.

The valuation of a business or other assets can have a significant bearing on the distribution of assets to creditors in the course of a distressed restructuring.

If restructuring is becomes contentious then questions regarding such a valuation can become important. In Saltri III Ltd v MD Mezzanina SA (and others) the valuation of the Stabilus business was central to whether junior debt was entitled to a share in the business’s assets post-restructuring or not.

The gap between the values ascribed to the Stabilus business by the respective experts was very substantial and the individual issues that contributed to that gap were technical. For example, the following issues played a central role in the determination of value:

  • The impact of evolving results on existing forecasts
  • Whether the discount rate should be adjusted for liquidity or not
  • Whether monthly or weekly betas are more representative of risk for smaller companies
  • The impact of growth prospects on valuation multiples
  • The instability of market multiples in a volatile market

In spite of the technical nature of these questions, Mr Giles was able to utilise the well-established theories and practices of financial economics to explain successfully to the court how each of these issues should be viewed given the facts of the case.  This case highlights the importance of using an expert that has a deep understanding of financial economic theory and the ability to explain technical concepts successfully to a non-technical audience.