Opinion Services

Boards of directors, special committees, and other fiduciaries are increasingly being subjected to shareholder, political and regulatory pressures. Hedge funds and other investors routinely take significant stakes in companies in order to "shake things up". Investment banks are finding themselves on both sides of the transaction. The credit markets have allowed significant leverage to be taken on by corporations. Based on its experience and independence, American Appraisal is accustomed to providing fairness and/or solvency opinions in connection with such complex transactions.

Fairness Opinions

The role of the financial advisor continues to evolve and our extensive, direct experience allows us to change with the times. We are being requested to become involved earlier in the transaction lifecycle, conduct, document and present a more thorough due diligence process, and provide significant detail on our analysis to the boards of directors and/or special committees. Our internal procedures are well documented, consistent with current norms and proposed regulations and include reviews by an independent committee of American Appraisal professionals.

Solvency Opinions

Lenders, financial advisors, attorneys, boards of directors and shareholders who are parties to an acquisition, merger, or recapitalization may be concerned with fraudulent conveyance issues associated with debt financing, dividend distributions, share buybacks, sale of subsidiaries, etc. An independent, third-party solvency opinion helps ease this concern as it serves as independent verification confirming that the transaction did not render the company insolvent.

The key criteria addressed by fraudulent conveyance laws:

Will the fair value and present fair saleable value of a company’s assets exceed its existing and/or new liabilities?

Will cash flow be available to pay debts as they mature?

Will there be adequate capital remaining after the transaction to conduct normal business operations?

As a result of our involvement in some of the largest LBOs over the last 25 years, American Appraisal has established a reputation for issuing credible, authoritative, and well-documented solvency opinions. We have an experienced team of financial consultants who perform extensive tests to meet due diligence requirements and address key concerns surrounding various types of transactions.