Steven M. Davidoff Solomon,
Fairness Opinions, 55
Am. U. L. Rev.
Available at: http://scholarship.law.berkeley.edu/facpubs/2300
This Article re-examines the fairness opinion, as well as its role and necessity. Corporate law and regulation, as well as attitudes with respect thereto, have advanced from the hallmark time of Van Gorkom. Finance, a young discipline, has also progressed markedly, and previously held assumptions and methodologies have been rejected, refined, or revised. This Article also analyzes the fairness opinion in light of these developments in law and finance. I conclude that current fairness opinion practice is still deeply flawed. Fairness opinions, and their underlying valuation analyses, are prone to subjectivity and are frequently prepared utilizing methodologies that simply do not jibe with best practices. These defects are exacerbated by the recurring problem of investment banks who are conflicted in their provision of fairness opinions.