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

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

Recording of a 90-minute CLE webinar with Q&A


Conducted on Wednesday, July 18, 2018

Recorded event now available

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Program Materials

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 best practices for the opinion giver to minimize risks.

Description

The fundamental concept for structured finance is the isolation of assets in a “bankruptcy remote” special purpose vehicle (SPV), which protects against borrower insolvency and the assets against credit risk of other entities, including the former owner of the assets. These transactions frequently use LLCs and statutory trusts, particularly Delaware statutory trusts.

Two structuring techniques achieve legal separation of SPVs: true sales and the “bankruptcy remote” nature of the SPV. Opinions of counsel in structured finance transactions address the legal separateness of the SPV from affiliated entities and the legal isolation of the SPV’s assets from affiliated entities and their creditors.

A non-consolidation opinion addresses, but does not establish, the separateness of the SPV. Instead, the opinion gives the recipient assurance that counsel for the originator and the SPV has considered all issues needed to render the opinion.

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 entity
  2. Authorization of transaction by 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 issues should the opinion-giver address in a non-consolidation opinion?
  • What are the bankruptcy risks for parties providing financing to a structured finance SPV?

Faculty

Gordon, Scott
Scott J. Gordon

Partner
Kirkland & Ellis

Mr. Gordon is the leader of the firm’s Derivatives Practice and a member of the Asset Finance and Securitization...  |  Read More

Quinn, Michelle
Michelle P. Quinn

Partner
Berger Harris

Ms. Quinn's practice focuses primarily on rendering advice as to matters of Delaware law relating to...  |  Read More

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