FAIRNESS OPINIONS

Although fairness opinions are not required by law, directors increasingly rely on outside experts before undertaking mergers, acquisitions, divestitures, and public offerings. The directors bear the ultimate responsibility to protect shareholder value. Nevertheless, outside advisors also face potential liability under both common law and federal securities law.

To avoid liability, a corporate board should select an outside financial advisor carefully. Directors should then rigorously evaluate the qualifications and conflicts of interest of such service providers and understand their research methodologies and assumptions.

In the end, both directors and advisors need to protect against potential lawsuits as a matter of normal business practice. At the outset, no one anticipates that deals will generate losses. Unfortunately, many transactions and deals do result in a loss of value for the shareholders. If losses are large, lawsuits will follow. Directors should obtain fairness opinions from established and creditable valuators and professionals without any conflicts of interest – whether it be direct or indirect (e.g., accountants).

Because of our established independent valuation practice and significant business environment, Evans & Evans is able to offer an exceptional perspective on fairness. We write opinions for boards of directors, special committees of the board, shareholders, trusts and courts of law.

Clients can rely on our opinions in various transactions, including:

We pride ourselves on the extensive research we conduct in doing fairness opinions so that material amounts of internal and external information which may affect values and potential are reviewed. Key variables, such as competitive factors and underlying technologies, are always reviewed and considered. Overall, by providing a detailed and accurate internal and external analysis, we help organizations to make well-informed business decisions.

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