A fairness opinion is a formally written analysis of the fairness, from a financial point of view, of a potential transaction. The opinion is based on the financial factors of a prospective transaction and provides an independent and objective analysis of the proposed transaction from the point of view of one or more interested parties.
A solvency opinion examines the ability of a company to meet its debt obligations as they come due, and is typically issued in connection with a highly leveraged transaction, a capital or debt restructuring, or a dividend recapitalization. Most solvency opinions apply three standard tests: the balance sheet test, the cash flow test and the reasonable capital or capital adequacy test. Each of these tests must be satisfied in order for the company to be considered solvent post-transaction.
We have extensive experience providing fairness and solvency opinions to boards of directors, transaction committees, independent trustees, lenders and others with a fiduciary obligation to a particular set of existing or prospective stakeholders. Our opinions are independent and objective, built on thorough research and detailed analysis, and provide our clients with added assurance and confidence as they make crucial transaction-related decisions.