Fairness Opinions Under Heightened Scrutiny

Strategies for Fairness Opinion and Engagement Letter Practice in M&A Transactions

Recording of a 90-minute premium CLE webinar with Q&A

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Conducted on Wednesday, July 30, 2008

Course Materials


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.



  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


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?


Charles H. Baker
Charles H. Baker

Paul Hastings

He focuses on all aspects of mergers and acquisitions and corporate finance matters. He has specific experience...  |  Read More

D. Casey Kobi
D. Casey Kobi
Vice President, IBD Legal
Lehman Brothers

He covers mergers and acquisitions, equity and debt capital markets, leveraged finance and principal transactions and...  |  Read More

Kevin C. Logue
Kevin C. Logue
Paul Hastings

He focuses on mergers and acquisitions and financial services litigation. He litigates disputes involving pre- and...  |  Read More