Solvency Opinions

Prairie utilizes its deep valuation and transaction advisory expertise to provide solvency opinions to boards of directors, special committees, trustees, lending institutions, and private-equity sponsors.  our opinions can help fiduciaries understand the impacts of a highly leveraged transaction and avoid claims of fraudulent conveyance or other illegal transactions

Our Process

When is a Solvency Opinion Required?

  • Develop acquisition strategy
  • Identify funding sources
  • Create target evaluation process
  • Identify acquisition team
  • Identify integration team

For solvency, the company must pass 3 tests

Test 1. Balance Sheet Test

Does the fair value of the company assets (including intangible assets) exceed its fair value of current and contingent liabilities after the proposed transaction?

Test 2. Cash Flow Test

Can the company meet its debt obligations as they become absolute and mature after the proposed transaction? This analysis should include “stress” tests to determine impacts of a business downturn

Test 3. Capital Test

Does the company have an unreasonably small amount of capital for the business after the proposed transaction? Can the company meet its operating expense, capital expenditure, and debt obligations?

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Middle - Market Focus

Middle - Market Focus

Prairie Capital Advisors is dedicated to serving the investment banking and financial advisory needs of middle - market business owners

Middle - Market Focus

Middle - Market Focus

Prairie Capital Advisors is dedicated to serving the investment banking and financial advisory needs of middle - market business owners

Middle - Market Focus

Middle - Market Focus

Prairie Capital Advisors is dedicated to serving the investment banking and financial advisory needs of middle - market business owners

Middle - Market Focus

Middle - Market Focus

Prairie Capital Advisors is dedicated to serving the investment banking and financial advisory needs of middle - market business owners