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Transaction Opinions

Fairness Opinions

A fairness opinion is a statement by an independent, qualified financial advisor that the consideration and financial terms offered in a pending merger, acquisition, sale or other transaction are fair, from a financial point of view, to, typically, the selling company and/or its shareholders, members or partners.

Solvency Opinions

Solvency opinions are often required by lenders in connection with an LBO or leveraged recapitalization as evidence, on their behalf, that in the event of a subsequent bankruptcy, (i) the additional obligations incurred and security interests conveyed by the debtor to the lender did not constitute a constructive fraud on pre-transaction creditors of the debtor, and (ii) the lender acted both in good faith and with reasonable prudence in making the loan to the debtor.

Reasonably Equivalent Value Opinions

The acquisition of the stock or assets of a financially distressed company for less than reasonably equivalent value or fair consideration may give rise to a claim that the transaction constituted a fraudulent conveyance.

Delaware Test Opinions

Delaware permits the directors of the corporation to “revalue” the assets and liabilities of the corporation to reflect their present fair values for the purpose of determining the amount of surplus available for stock repurchases and dividend payments when they have reason to believe that the books and records of the corporation, which although prepared in accordance with GAAP, do not necessarily reflect current values.

Buy-Sell Agreements

A “Buy-Sell Agreement”, usually incorporated as a subsection in a more comprehensive Stockholder Agreement, restricts the transferability of shares in a closely-held corporation and defines the conditions upon which liquidity may be achieved.