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soft assets, soft inputs, soft variables, goodwill, valuation, reorganization, going concern surplus, chapter 11, secured credit, value allocation, section 363 sale, plan of reorganization, corporate restructuring


When a company is worth more as a going concern than on a liquidation basis, what creates that additional value? Is it the people, management decisions, the simple synergies of the operating business, or some combination of these types of soft variables? And perhaps more importantly, who owns or has an interest in these soft variables? This article explores these questions under existing legal doctrine and practice norms. Specifically, it discusses the characterization of soft variables under applicable law and in financing documents, and it surveys related judicial decisions. It also considers the overarching public policy and Constitutional implications of the treatment of soft variables in and outside of the federal bankruptcy scheme. The article concludes by considering the optimal treatment of soft variables in corporate reorganizations.

Publication Citation

2015 University of Illinois Law Review 509.


Bankruptcy Law | Business Organizations Law