Boards of Directors and Other Fiduciary Parties

We routinely serve as independent financial advisers to assist both for-profit and not-for-profit entity boards of directors in the process of fulfilling their fiduciary duties.

We serve for-profit entity boards of directors.
We provide independent financial advisory opinions to boards involved in the pricing and structuring of a merger or acquisition transaction. This financial advice includes the calculation of a reasonable share exchange ratio. This financial advice includes the design of transaction-specific debt and equity securities. And, this financial advice includes the design and valuation of contingent compensation earnout provisions.

We perform buy-sell agreement and other ownership transition valuations. We perform complex business and secruity valuations for related party transaction purposes. We value business unit spin-off and other cash flow generation opportunities. We analyze expected post-merger synergistic benefits, and we recommend (and opine on) merger or acquisition price offers.

We serve public company boards of directors.
We are routinely called on to opine on the fairness (from a financial perspective) of a public corporation that has made a stock tender offer in order to go private. These going-private analyses often include consideration of the appropriate control price premium to be paid for the publicly traded shares.

We serve mutual organization boards of directors.
The demutualization of a mutual  insurance company, savings bank, or other financial institution usually involves two important questions. The first question is: What is the value of the overall mutual entity (for either post-demutualization IPO or other transaction purposes)? The second question is: How should the overall demutualization sale proceeds be allocated among the various classes of mutual entity depositors, policyholders, or other mutual owners?

We serve ERISA fiduciaries.
We are well known for our transaction opinions regarding ESOP formations and ESOP employer corporation stock acquisitions. As the independent financial adviser, we opine to the ESOP trustee as to whether the purchase or sale of the sponsor company securities is fair to the ESOP participants (from a financial perspective). This opinion considers both the absolute fairness and the relative fairness of the proposed employer stock purchase or sale transaction.

Under ERISA, an ESOP cannot pay more than adequate consideration to buy employer corporation securities. Also under ERISA, an ESOP cannot accept less than adequate consideration to sell employer corporation securities. Our adequate consideration opinions analyze both the price and the structure of the proposed employer stock purchase or sale transaction. Our adequate consideration opinions provide assurance to the ESOP trustee that the proposed transaction complies with both ERISA and IRS requirements.

We serve not-for-profit entity boards of directors.
Not-for-profit entities (in health care, education, and other professions) have a responsibility to maintain the assets they manage for the public benefit. Therefore, not- for-profit entities cannot enter into transactions to sell assets for less than fair market value, to buy assets for more than fair market value, or to pay more than fair market value for contractual services. If the not-for-profit entity enters into a transaction that provides a private inurement to an individual or for-profit entity, then the not-for-profit entity may be subject to intermediate sanctions or other tax penalties. Our fair market value opinions provide assurance to the not-for-profit entity board regarding the purchase, sale, or contract fairness.

Whenever a for-profit entity transacts with a not-for-profit entity, the respective boards should be concerned about private inurement, excess benefits, or other related issues. We perform fair market value valuations of the transferred entity (e.g., medical practices, clinics, hospitals). We also perform fair market value valuations of the services contracts (e.g., office lease, employment agreement, management contract) between the for-profit entity and the not-for-profit entity.

For not-for-profit hospital clients, we routinely opine on the fairness of the purchase price for medical practices, dialysis centers, urgent care centers, ambulatory surgery centers, diagnostic imaging facilities, and other health care businesses and practices. These fair market value valuations are intended to provide comfort to the not-for-profit entity board with respect to tax and other regulatory issues.

We serve debtor company boards of directors.
When a debtor company approaches the zone of insolvency, the duty of the company directors shifts from the shareholders to the creditors. The debtor company should not enter into transactions (e.g., financings, dividends, etc.) that will cause the company to become insolvent. In our solvency analyses, we consider all generally accepted solvency tests, including the balance sheet test, the cash flow test, and the capital adequacy test.