Despite earlier reports failing to contain details of ACAS' sale of Imperial, ACAS' subsequent announcement offers some interesting and bullish facts. First, the Imperial sale is an all-cash deal that provides ACAS with $66m in immediate liquidity. This is good news.
But the better news?
The $66m sale is $16m ahead of the portfolio company's prior-quarter FAS-157-compliant "fair value" – meaning that actual liquidation showed a 34% premium to SEC-reported valuation.
Better-than-FAS-157 exits aren't universal, but are definitely not uncommon. ACAS doesn't always give us all the information we want on transactions, and doesn't always sell at a substantial premium to FAS-157-compliant values, but selling a third above "fair value" seems common enough even in these hard times to cast doubt on the value to shareholders of FAS-157 in guaging the value of assets. Since substantial variation in value seems to exist primarily to the updide, and much of ACAS' investment portfolio consists of investments valued at nil (even if some of the debt is still paying), it stands to reason that things are less bad for ACAS than FAS 157 would have us believe.