Fairness Opinions: Rapid Fire

What this video covers

• What a fairness opinion actually certifies: a state law duty of care defense for the board, not a best-price guarantee
• When an opinion is typically commissioned (going-private, related-party, stock-for-stock, conflicted transactions) and who commissions it
• The distinction between the internal fairness committee (bank quality control) and the external special committee of independent directors (client-side, for conflicted deals)
• The five valuation methods used to establish substantial basis (comparable company, precedent transactions, discounted cash flow (DCF), premiums paid, leveraged buyout (LBO) / ability-to-pay)
• Why FINRA rules disclose conflicts rather than prohibit them, and what success fees and stapled financing mean for the six required letter disclosures
• The six FINRA disclosure items versus the six SEC proxy categories, and which three are unique to each regime (fairness committee approval and insider compensation for FINRA; selection process and summary of analyses for SEC)
• The two-year material-relationship lookback period that applies to both FINRA and SEC disclosure regimes