27 Apr Analysis of Claim from Corporate Timber Plantation Owner
A large corporate had lodged a claim for the value of a pine plantation lost in the Victorian Black Saturday Fires of 2009. The claim was being assessed by a Court Appointed Independent Advisory Panel. ARC was appointed by the solicitors acting for one the defendants to assess the reasonableness or otherwise of the claim.
What we did
To support its’ claim, the plantation owner had provided a large volume of operational information. The intention of the plantation owner was to present the earnings of the plantation under “With Fire” and “Without Fire” scenarios. The “Without Fire” scenario was comprised mainly of quantitative data and complex spreadsheets from the plantation owner’s management information system. The “With Fire” scenario had been constructed in a similar format but using different assumptions and data.
The first task for ARC was to gain an understanding of how, what were very complex spreadsheets, had been put together and interacted. It should be noted that due to the long length of pine tree rotations, the data covered a period in excess of 60 years.
The second major task was to determine whether the methodologies used were appropriate and if the assumptions and figures used were reasonable. This was done by sourcing industry information and consulting other forestry experts.
As a result of our analysis we identified four areas of the plantation owners claim where we believed an inappropriate methodology had been used or an assumption used that was incorrect. These findings had the effect of reducing the plantation owners claim by an amount in excess of one million dollars. ARC’s findings, which had not been identified by any of the other multiple experts working on the matter, were accepted by the Independent Advisory Panel and ultimately by the plantation owner.