Rendering Opinions in Structured Finance and Securitized Lending Transactions: Best Practices, Principles of Bankruptcy Remoteness, Legal Separateness and More

Navigating Assumptions, Qualifications, Limitations and Use of Letters; Reducing Risks for Opinion Givers

A live 90-minute CLE webinar with interactive Q&A


Thursday, June 20, 2019

1:00pm-2:30pm EDT, 10:00am-11:30am PDT

Early Registration Discount Deadline, Friday, May 24, 2019

or call 1-800-926-7926

This CLE webinar will provide a review of the use of opinion letters in structured finance transactions, explain various elements of the opinions and outline the types of assumptions and qualifications the opinion giver should utilize to minimize risks.

Description

The fundamental concept for structured finance is the isolation of assets in a "bankruptcy remote" special purpose entity (SPE) and the separateness of the SPE from its affiliates, which reduces the risk of bankruptcy and helps shield an SPE's assets against an affiliate's creditors. These transactions frequently use LLCs and statutory trusts formed in Delaware.

Two structuring techniques help achieve legal separation and bankruptcy remoteness in SPEs: the inclusion of bankruptcy remoteness and separateness provisions and strict limitations on the business purpose of an SPE in its organizational documents. Lenders, rating agencies, trustees, issuers and servicers generally require specialized opinions of counsel in structured finance transactions. Those opinions address the legal separateness of the SPE from affiliated entities, the legal isolation of the SPE's assets from the creditors of affiliated entities and the likelihood that such provisions will be respected by a bankruptcy court and enforced by state courts in the SPE's jurisdiction of formation.

A non-consolidation opinion addresses whether the SPE has been properly structured and meets established case law and other criteria for the enforcement of bankruptcy remoteness and separateness provisions. This opinion gives the recipient assurance that the risk of bankruptcy and substantive consolidation have been minimized to the greatest extent possible and the companion state law opinions evaluate the enforceability of those protections.

Listen as our authoritative panel of practitioners discusses drafting opinions of counsel in structured finance transactions with particular emphasis on rendering non-consolidation opinions, and best practices for the opinion giver to minimize risks.

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Outline

  1. Valid formation of the entity
  2. Authorization of transaction by the entity
  3. Substantive consolidation opinions
  4. Authority to file for bankruptcy

Benefits

The panel will review these and other critical issues:

  • How should the opinion giver address the issue of bankruptcy remoteness: What are the limitations, assumptions, and qualifications that the opinion giver should consider? What should you be looking for in the SPE's organizational documents?
  • What issues should the opinion-giver address in a non-consolidation opinion?
  • What are the bankruptcy risks that parties providing financing to a structured finance SPE can minimize?
  • What should state law opinions address?

Faculty

McDougall, Lorne
Lorne W. McDougall

Partner
Locke Lord

Mr. McDougall is a Partner in the Firm's Real Estate Department and resident in the Boston office. He is a former...  |  Read More

Winter, Christopher
Christopher M. Winter

Partner
Duane Morris

Mr. Winter is a Delaware business lawyer who focuses his practice on chapter 11 bankruptcy law and proceedings,...  |  Read More

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Strafford will process CLE credit for one person on each recording. All formats include program handouts. To find out which recorded format will provide the best CLE option, select your state:

CLE On-Demand Video

48 hours after event

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DVD

10 business days after event

$247 + $19.45 S&H