The current environment in mergers and acquisitions requires company board members to select their advisors carefully, to ensure they are getting qualified, independent financial advice. The courts have grown increasingly sophisticated in evaluating the sale process, financial advisor independence, and the transaction price. As more transactions are challenged in the courts under a breach of fiduciary duty or an appraisal action, we think it is particularly important to track precedent decisions and apply valuation methodologies in a manner that are consistent with current industry practice and will be accepted by the court.
A sample of our previously issued fairness opinions is available upon request. Please find The Opinion Report, our newsletter addressing current fairness opinion issues, as well as other articles published in national journals listed below. Call our number below to discuss any fairness opinion questions you may have.
"During the last recession, my client received a reasonable buy-out proposal but the proposal was far less than the unrealistic expectations of certain shareholders. Greg stepped up and provided a fairness opinion and good advice to the Board promptly and for a quite reasonable fee. My Board was delighted and felt that it received excellent value. The deal closed and the business survived--a happy ending under difficult circumstances."
Dan Cohn, Partner, Farella Braun + Martel
Articles & Newsletters
"...the way the Delaware Supreme Court and Court of Chancery have defined the board of directors’ fiduciary duties to the common stockholders and described the definition of value has, in some circumstances, left room for underwater common stockholders to claim their shares have value."
"Two recent Delaware Court of Chancery cases have highlighted the importance of determining a going-concern value in a fairness opinion analysis. In both In Re TRADOS Incorporated Shareholder Litigation (Trados) and In Re Rural Metro Corporation Stockholders Litigation (Rural) the Court relied upon the discounted cash flow method (DCFM) to develop a going-concern value. In Rural, the Court found RBC Capital Markets, LLC liable for approximately $75.8 million for aiding and abetting breaches of fiduciary duty. In Trados, the DCFM helped the defendants demonstrate the plaintiffs’ common stock had no value before the merger, and no liability was found or damages awarded. Given the potential liability for acquisition target board members and their advisors, and Court’s heavy reliance on the DCFM, I thought it would be helpful to briefly review the cases and the Court’s preferred application of the DCFM."