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Product ID: 405421EAU
 
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Commercial Lending Opinion Letters: Rights, Obligations and Expectations

OnDemand Webinar (87 minutes)

Understand the proper role of the legal opinion and develop techniques to minimize or eliminate unnecessary and wasteful contention.Commercial lenders routinely require a borrower's lawyer to deliver a legal opinion at the closing of the loan transaction. The borrower has to pay for this but rarely believes that the exercise provides any benefit to the borrower. If the legal opinion is not negotiated until the end of the transaction, or if the borrower's lawyer and the lender's lawyer cannot agree on some element of the opinion, it often becomes a sticking point at the last minute, exacerbating the borrower's frustration. How should a borrower's lawyer deal with the opinion requirement to ensure that the process is handled efficiently and (relatively) inexpensively? This topic will help lawyers who engage in financing transactions, both on the lenders' and borrowers' side, understand the proper role of the legal opinion and develop techniques to minimize or, hopefully, eliminate unnecessary and wasteful contention over the issues that can arise if the process is not handled intelligently.

Authors

Alan S. Dubin, Arent Fox LLP

Agenda

Overview

• Why Are Closing Opinions Requested?

• What Issues Should Closing Opinions Address?

• What Does the Lender Really Need?

• What Can the Borrower's Lawyer Really Provide?

Issues Covered by Most Closing Opinions

• Entity Issues

- Formation, Legal Existence and Good Standing

- Power of Entity to Engage in Transaction

- Absence of Conflict With Organic Documents

- Due Authorization, Execution and Deliver

- Government Approvals Required by Borrower

- Violations of Applicable Law Resulting From Financing Transaction

• Validity, Binding Effect and Enforceability of Financing Documents

- Standard Carve-Outs for Bankruptcy and Other Creditors' Rights and Equitable Principles

- Laundry Lists of Other Carve-Outs

- Practical Realization Opinions

• Factual Opinions

- Conflicts With Borrower's Other Legal Obligations

- Violations of Court Decrees or Orders Binding on Borrower

- Pending Proceedings Against Borrower

- Threats of Legal Proceedings Against Borrower

Specific Issues Covered by Some Closing Opinions

• Usury

• Perfection of Uniform Commercial Code Security Interests

• Effect of Real Estate Mortgages/Deeds of Trust and Assignment of Leases

• Substantive Consolidation

• True Sale

• Investment Company Act