Originally Posted by Daede1
Good point, but if the bank is forcing a sale, then they dont really care what value has been assigned, they just want as much as possible, as quickly as possible.
Valuations only matter in calculating interests on debt accrued against assets.
Absolutely, but say 'hypothetically' a company were not doing too well with the bank, so they told them that the assets were worth a hell of a lot more than they actually were.
Great, the bank are happy as they think that at least the assets are there if it all goes wrong and at least they will get some of their money back, so they let them continue on.
Imagine the banks reaction when they discover that what these assets were valued at on paper is way off the mark to what they are actually worth, I wouldnt imagine that they are very happy and would be well within their rights to demand that action is taken (the rumours about the shorts fleet being sold to BAC ??), of course its all hypothetical.