The new publication Transaction Advisors has a number of great articles from some leading appraisers and other. One interesting piece is from Bruce Fox from the Corporate and Securities practice group at Neal, Gerber & Eisenberg. In What to Disclose to Stockholders about Fairness Opinions, Fox argues that the duty to disclose extends not only to “the basic valuation exercises that [the financial advisors] undertook, the key assumptions that they used in performing them, and the range of values that were thereby generated”, but also to whatever facts and circumstances surrounded the process by which the fairness opinion was issued.
BVWire sees Fox' article as further support for the trend requiring high valuation standards generally for fairness opinions. Evidence continues to mount that conflicts of interest and self-justifying opinions are being challenged more and more frequently. And, weak fairness opinions are getting boards of directors in more and more hot water--either via securities litigation, or during impairment tests in the out years.