Introduction to Legal Opinions in Loan Transactions: Purpose, Elements, Standards and Practices, Due Diligence, Risks
Course Details
- smart_display Format
On-Demand
- signal_cellular_alt Difficulty Level
Intermediate
- work Practice Area
Banking and Finance
- event Date
Thursday, December 12, 2024
- schedule Time
1:00 p.m. ET./10:00 a.m. PT
- timer Program Length
90 minutes
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This 90-minute webinar is eligible in most states for 1.5 CLE credits.
This CLE webinar will discuss what a legal opinion is and its purpose in the context of a commercial lending transaction. The panel will review the common elements and standard language of an opinion letter, discuss the rights, obligations, and expectations of opinion givers and lenders, outline best practices for performing due diligence, and highlight the attendant risks and potential liabilities.
Mr. Grossman has a wealth of experience in real estate finance law and has represented clients in a broad range of general commercial and real estate finance matters for more than 30 years. He focuses his practice on UCC secured transactions, real estate secured transactions, and other financing transactions (including securitized financings) – from the initiation stage through workouts and restructurings – and third-party legal opinions. Mr. Grossman has an in-depth understanding of the CMBS market, and for several years devoted his practice to representing borrowers in connection with real estate financings bound for that market. This work has expanded to include representation of Delaware statutory trusts, real estate investment trust subsidiaries, and investors in commercial real estate. Mr. Grossman represents clients in connection with a broad range of commercial financing transactions, secured and unsecured, including structured finance and tax-exempt bond financings of infrastructure projects.
Mr. Ryan represents clients in a wide range of securitization and commercial lending matters and transactions. He represents financial institutions in various types of asset securitization and other structured transactions, including securitizations and other structured transactions for film and music assets, as well as unsecured and secured bank financings generally.
A legal opinion is a formal document containing counsel's conclusions regarding various legal matters relevant to the parties and the transaction based on counsel's review of a defined set of documents and information and consideration of applicable law.
A legal opinion in a loan transaction does not guaranty that the loan will in fact be repaid, nor even that the representations made by the borrower in the loan documents are accurate. Instead, the purpose of the opinion is to provide an additional layer of assurance to the lender that the loan documents will be enforceable against the borrower and that the borrower has satisfied the legal formalities necessary to enter into the loan.
To serve the needs of the borrower and lender while also protecting the attorney against potential liability, a well-written opinion letter describes the scope and limitations on the opinions rendered, the factual (and sometimes legal) assumptions underlying the opinions, and qualifications to the opinions rendered (in the case of assumptions and qualifications, to the extent not relying on customary practice to the effect that certain assumptions and qualifications are understood to apply to the opinions even though not expressly stated). The content of an opinion letter depends largely on the legal and factual investigations and due diligence performed by the opinion giver, guided by the requirements of the parties and customary practice of attorneys engaged in the practice of giving legal opinions.
Listen as our authoritative panel discusses the purpose and elements of a legal opinion, the types of issues that typically arise, the potential risks for the opinion giver, and ways to mitigate these risks.
- Overview: what a legal opinion is and isn't
- What legal opinions address
- Legal opinion standards and practices
- Format and expression of opinion
- Legal opinion process
- Potential risks and liabilities for opinion givers and ways to mitigate these risks
The panel will review these and other key considerations:
- What is a legal opinion and why are they often required by lenders in commercial loan transactions?
- What do legal opinions address and what are common standards and practices?
- What level of due diligence is necessary to give certain opinions?
- What is the basic format for a legal opinion?
- What is the process of preparing and negotiating legal opinions, and what issues typically arise when negotiating a legal opinion?
- What are the potential risks and liabilities for the opinion giver and how can these risks be mitigated?
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