Inventory valuation for lenders, fiduciaries and transactions

Beverage alcohol inventory is a specialist asset

It is regulated, perishable in parts, price-controlled in some states, and includes a small number of items whose market value bears no relationship to their cost. A lender, trustee, executor or acquirer relying on book value or a generic appraisal will be wrong in both directions: overstating everyday stock that has aged past its sell-by, and understating the allocated and collectible product that holds real value.

Engagements

• Asset-based lending. Orderly-liquidation and forced-liquidation value of inventory pledged as collateral by liquor retailers, wine shops, distributors and hospitality groups.
• Bankruptcy, receivership and assignment. Inventory valuation for trustees, receivers and creditors, including identification of high-value items for separate disposition.
• Estates and trusts. Valuation of business inventory and private collections for administration and distribution.
• Transactions. Inventory due diligence for buyers, sellers' advisors and lenders in the acquisition of beverage alcohol businesses: what is really on the shelf, what it is worth, and what will not sell.
• Partnership and shareholder disputes. Neutral inventory valuation where the value of the stock is contested.

Method

We start from the records: POS and inventory-management exports, distributor invoices, purchase history and physical counts. We reconcile them, identify allocated and collectible product, flag dead and damaged stock, and value each line on the basis required, using live distributor cost and verified market pricing, with sources documented. Where a physical count or inspection is needed, we perform or supervise it.

Deliverable

A SKU-level schedule and a written report that explains the basis of value, the sources, the assumptions and the adjustments, in language a credit committee, a court or a beneficiary can follow.