Michel Feldman Quoted in Corporate Secretary

The article entitled "Conflict of Interest" in the May 2006 issue of Corporate Secretary magazine points out that fairness opinions are attracting attention from investors and regulators as concerns emerge about their veracity and independence. Since the 1980s fairness opinions have become de rigueur in M&A activities as a succinct way of, well, covering corporate posteriors. But this "proof" of board due diligence has taken a heavy beating in recent court cases, as the current investment and business climate has seen the spotlight of scrutiny focus on fairness opinions.

A growing number of boards are beginning to bite the bullet and order a second fairness opinion from a disinterested party. "I think that will grow over time," says Michel Feldman, partner at Seyfarth Shaw. "We're in an evolutionary process of corporate governance, and little by little . . . you're going to see more things done by the board that will ultimately lead to more independence and ultimately avoid any appearance of conflict."

Directors, corporate secretaries and legal teams may groan at the need for yet another layer of expensive due diligence, but it doesn't look like the problem is going away anytime soon.