Fairness Opinions in Transactions Involving ESOP-Owned Companies

Many transactions involving an ESOP-owned company require a fairness opinion – an opinion as to whether the transaction, taken as a whole, is fair and reasonable from a financial point of view. Unlike an appraisal, a fairness opinion represents the judgment of an independent and experienced professional applying recognized principles of evaluation about the fairness of the financial terms of the transaction. David Solomon discusses the events that may give rise to a fairness opinion, the elements of a fairness opinion, and the parameters of such an opinion in this article reprinted with permission from NCEO.