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Wendy Berman Discusses Fairness Opinions in Wake of InterOil/ExxonMobil Decision

Publish: 01/12/2017

Wendy Berman was quoted in an article titled "Fairness Hearings on Trial: Yukon Court of Appeal Shakes up Longstanding M&A Practice" published as an online exclusive by Lexpert.ca, on January 10, 2017. This article looks at a recent decision regarding a proposed merger between InterOil and ExxonMobil Corp.

Writes Lexpert: "The long-established practice of providing shareholders with a single one-line fairness opinion from the company's own financial advisers on a proposed sale or merger has been challenged by a precedent-setting decision from an unlikely place: The Court of Appeal of Yukon.... the potential fallout from InterOil Corporation v. Mulacek is considered so serious that senior practitioners from a small knot of Canada's top corporate firms have formed an informal working group to consider practice implications."

Says Wendy: "The court is saying if you want to rely on the fairness opinion as evidence of financial fairness for the court, one line doesn't do it." Going forward, she believes Canadian companies that recommend their shareholders support a sale or merger "will arguably have to put their considerations that went into finding the transaction financially fair right into the information circular or elsewhere. Who will bear the responsibility for signing for the information will have to be sorted out between boards of directors and their financial advisors."

Read the full story here.


The successful appellant in the lawsuit, Mr. Mulacek, a founder and former chairman and director of InterOil, was represented in the Yukon Supreme Court and the Yukon Court of Appeal by Cassels Brock. You can read a full summary of the decision here.