Prior to the consummation of certain transactions, it may be necessary for an independent, third party evaluation to be conducted to establish the fairness of the transaction to the shareholders of the company. In some cases, a determination of financial fairness is legally required.
In recommending an acquisition offer to shareholders of a company, it is prudent for the board of directors to have an independent financial advisory firm provide a written opinion as to the fairness of the transaction from a financial point of view. Fairness opinions are presented to the board of directors and published with proxy materials where appropriate.
Stern Brothers is experienced in performing a thorough review of the structure and terms of a proposed transaction in rendering its opinion of fairness from a financial point of view. Among the factors considered before issuing an opinion are the fairness of the price in relation to current and historical market prices, comparable transactions, going concern value and liquidation value.
A financial advisory firm’s opinion of financial fairness may be influential in protecting the directors against a lawsuit charging that they failed to exercise reasonable business judgment when they approved the transaction. Solvency opinions are issued due to federal and state law dealing with fraudulent transfers and with corporate distributions to shareholders in LBO’s.
Key Contacts
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John C. Korschot
PresidentMr. Korschot is the President of Stern Brothers Valuation Advisors and has been involved in the areas of finance and business appraisal since 1976.
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Steven L. York
Executive Vice PresidentMr. York is an Executive Vice President of Stern Brothers Valuation Advisors and has been involved in the areas of auditing, finance, and business appraisal...
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