CRA consultants conducted analyses to assess the likelihood that Bumble Bee could become insolvent as a result of a fine sought by the US Department of Justice (DOJ) in an alleged price-fixing conspiracy. The DOJ agreed to lower the fine levied against Bumble Bee in part because a larger fine could lead to insolvency and jeopardize the company’s continued viability.
In connection with a DOJ criminal investigation initiated in July of 2015, Bumble Bee retained Professor Mark Zmijewski, a senior consultant to CRA, to conduct a comprehensive solvency and financial analyses of the company and assess the likelihood of insolvency given a proposed antitrust fine sought by the DOJ. Professor Zmijewski’s analyses demonstrated that an antitrust fine above a certain threshold would likely render Bumble Bee insolvent, which he presented to the DOJ and which was provided to the Court.
ASC 820: Determining fair value in circumstances of reduced market liquidity or inactivity
Challenging market conditions relating, at least in part, to the COVID-19 pandemic are reminiscent of the financial markets during the global financial crisis...