California’s Fairness Opinion Requirement For Interested Party Proposals


In 1968, Congress enacted the Williams Act to regulate tender offers. Two decades later, the California legislature enacted Corporations Code Section 1203 to impose additional requirements on tender offers and other specified transactions by an “interested party”.

Interested Parties

An “interested party” is a person (Section 18) who is a party to the transaction and who:

- Directly or indirectly controls (Section 160) the subject corporation;

- Is, or is directly or indirectly controlled by, an officer or director of the subject corporation; or

- Is an entity in which a material financial interest (Section 310(a)) is held by any director or executive officer (as defined in Section 1203(a)) of the subject corporation.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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