2012 Fiscal Year Final Research Report
Function of and Issues with Fairness Opinion in Going-Private Transaction; Can F.O. exempt directors from their responsibility?
| Project/Area Number |
23830027
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| Research Category |
Grant-in-Aid for Research Activity Start-up
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| Allocation Type | Single-year Grants |
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| Research Field |
Civil law
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| Research Institution | Kanazawa University |
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Principal Investigator |
NAGAE Wataru 金沢大学, 法学系, 准教授 (20610786)
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| Project Period (FY) |
2011 – 2012
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| Keywords | 企業買収 / 会社支配権取引 / 専門家の意義 |
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| Research Abstract |
Through an exploration of the arguments in the U.S., the author understands thatfairness opinions can function as a complement to a market-based mechanism in closed-market deals because they can analyze the hypothetical value of the corporation and add value to show fairness with opinion. Nevertheless, fairness opinions haveinherent limitations: they cannot show an ascertained or predicted price or forecast the price an acquirer would ultimately offer. As a response to such limitations, Americanacademics have recommend that courts review the reasonability of fairness opinionsand/or their fee structure and develop guidelines together with a self-regulatory body.With respect to the role of fairness opinions in Japan, a number of Japanese academics have made reference to using fairness opinions or some other outside opinion in corporate control transactions because they share the same doubt concerningmarket-based mechanisms. However, there exist certain conflicts on how to interpret the duty and liability of corporation directors. This study examines recent cases and shows that recent court decisions and academics have tended to require directors to show, at minimum, fair process. Moreover, this article notes that courts have not considered the situation for relying on fairness opinions, nor the deal structure for, norinherent problems with them. To correspond, this article suggests that courts shouldconsider these issues when they use fairness opinions to deny the liability of directors,and calls for disclosure system amendment so as to require additional disclosure in certain closed-market transactions.
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