Fairness Opinions Under Heightened Scrutiny

Description

Fairness opinions issued by investment banks in M&A transactions now face increased judicial and regulatory scrutiny. In February, the Seventh Circuit addressed the potential liability for investment banks issuing fairness opinions in what many call the most instructive court decision in years.

The Seventh Circuit ruling provides new case law on the duty to update or withdraw fairness opinions, particularly when market conditions change between the time of the opinion and the closing of the deal. The precedential impact of the case remains to be seen.

Nonetheless, the case highlights the significance of the engagement letter in M&A transactions and whether an investment bank should rely on management projections lacking independent verification when issuing fairness opinions.

Listen as our panel of attorneys — including an M&A transactional attorney, counsel for an investment bank, and an M&A litigator — reviews the recent case law and regulatory activity regarding fairness opinions and offers best practices for issuers and recipients of fairness opinions and related engagement letters.

Outline

1. Recent litigation, regulatory and shareholder activity
   1. HA 2003 Liquidating Trust v. Credit Suisse Securities LLC (7th Cir. 2008): its scope and precedential impact
   2. FINRA Rule 2290(a)
2. Current state of the law regarding fairness opinions
   1. Smith v. Van Gorkom
   2. Toys-R-Us
   3. In re Topps Shareholders Litigation
3. Best practices for fairness opinions and engagement letters
   1. Engagement letters
   2. Data used to support opinion: reliance, diligence and investigative duties
   3. Second opinions: necessary or useful?
   4. Recent disclosure issues related to fairness opinions

Benefits

The panel will review these and other key questions:

• How does the recent Seventh Circuit opinion, HA 2003 Liquidating Trust v. Credit Suisse Securities LLC, change the landscape for fairness opinion practice?
• What are some strategies for drafting and negotiating the engagement letter to protect your client's interests and minimize liability if a deal goes wrong?
• What are some best practices for issuers and recipients of fairness opinions to minimize legal risks?

CLE Credit

Strafford's live seminars qualify for CLE in every state that accredits webinars. They offer you a high quality, cost effective, and convenient CLE option, with no lost travel time or expenses.

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