In a complex transaction, closing the deal is only part of the challenge. Boards, special committees, executives, and counsel also need confidence that the process is sound, the economics are supportable, and the decision can withstand scrutiny after closing. The author shares when to get a fairness or solvency opinion. In a complex transaction, closing the deal is only part of the challenge. Boards, special committees, executives, and counsel also need confidence that the process is sound, the economics are supportable, and the decision can withstand scrutiny after closing. That is where fairness and solvency opinions can help. Although they…
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Part II of II This is a two-part article. In this second part, the authors discuss valuation and the approaches used to value contingent assets and liabilities. Read Part I here.
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Part I of II This is a two-part article. A variety of methods may be appropriate, depending on the context, to value contingent or disputed assets or claims in solvency opinions. These include probability discount, hindsight, and traditional valuation of future earnings. Other possibilities are the cost of insurance or Monte Carlo simulation. The authors discuss the cases and the uses and limitations of the various methods.