Fairness Opinions

This Article re-examines the fairness opinion, as well as its role and necessity in corporate control transactions. This Article argues that today\u27s fairness opinion regime is deeply flawed and, as a consequence, a fairness opinion has little meaning. The reasons are primarily this: the financial analyses underlying fairness opinions, as currently prepared by investment banks, are prone to excessive subjectivity and are frequently the product of valuation techniques that are not in accord with best practices. These defects are exacerbated by the recurring problem of these same investment banks who are conflicted in their provision of these opinions. Meanwhile, SEC and FINRA regulation of fairness opinions does not adequately address these fundamental issues while the Delaware courts continue to periodically reassert, without question, Smith v. Van Gorkom\u27s implicit fairness opinion requirement, thereby bestowing excessive significance to the fairness opinion. This Article, though, does not call for the fairness opinion\u27s death. Rather, I argue that the fairness opinion regime should be reformed through a quasi-public, standard-setting body. Creation of this body and its adoption of standards and guidelines for preparation of a fairness opinion and its undergirding financial analyses, as well as heightened disclosure requirements, should enhance the economics and usefulness of the fairness opinion by reducing subjectivity in valuation, ensuring proper grounding and permitting increased market scrutiny. Implementation of these reforms would also do more to alleviate the related and repeatedly cited problem of investment bank conflicts of interest than prior disclosure-based and other proposals. If these reforms are adopted, the fairness opinion, in and of itself, is still not a panacea. It will always be an inferior substitute for a market-based approach to determine the fairness of the consideration in a corporate control transaction. However, a valuation conducted with rigor and in accordance with disclosed standards and guidelines can inform materially as to value when a market-based price is unavailable or unobtainable. In such a context, a fairness opinion can have meaning. Even in such situations, though, the inherent limitations of state-of-the-art valuation should be recognized; a fairness opinion should only be one of many tools to assist a board in gauging what is a fair price. The Delaware courts should recognize this, repudiating Van Gorkom\u27s wholesale, implicit fairness opinion requirement when the agreed price is a market-based one. In other circumstances, a fairness opinion should not be required, but if received, should be considered by the Delaware courts as only one indicative factor to be utilized in assessing a board\u27s satisfaction of its duty of care

Lock-Up Creep

The article discusses a reported increase in the number of merger agreement lock-ups that have occurred as of June 2013, focusing on the causes of lock-up creep and its potential impact on the takeover market. It states that lock-up creep is a phrase that is used to describe a rise in the number and type of merger agreement contractual devices that buyers and sellers negotiate in an acquisition agreement. Attorney negotiations, bidders, and various legal cases are examined

Inhibitory postsynaptic actions of taurine, GABA and other amino acids on motoneurons of the isolated frog spinal cord

The actions of glycine, GABA, α-alanine, β-alanine and taurine were studied by intracellular recordings from lumbar motoneurons of the isolated spinal cord of the frog. All amino acids tested produced a reduction in the amplitude of postsynaptic potentials, a blockade of the antidromic action potential and an increase of membrane conductance. Furthermore, membrane polarizations occurred, which were always in the same direction as the IPSP. All these effects indicate a postsynaptic inhibitory action of these amino acids. When the relative strength of different amino acids was compared, taurine had the strongest inhibitory potency, followed by β-alanine, α α-alanine, GABA and glycine. Topically applied strychnine and picrotoxin induced different changes of postsynaptic potentials, indicating that distinct inhibitory systems might be influenced by these two convulsants. Interactions with amino acids showed that picrotoxin selectively diminished the postsynaptic actions of GABA, while strychnine reduced the effects of taurine, glycine, α- and β-alanine. But differences in the susceptibility of these amino acid actions to strychnine could be detected: the action of taurine was more sensitively blocked by strychnine compared with glycine, α- and β-alanine. With regard to these results the importance of taurine and GABA as transmitters of postsynaptic inhibition on motoneurons in the spinal cord of the frog is discussed