Closing Opinions For the Non-Specialist
As a condition to closing a financial transaction, company counsel often is expected to deliver a legal opinion letter to the party on the other sidethe lender, investor, or underwriter. Legal opinion letters delivered at the closing of a financial transaction to a party that is not the opinion giver's client have come to be referred to as third-party closing opinions.
Some lawyers are experts in the preparation of opinion letters. Many are not. This paper is intended to help those who are not render third-party closing opinions. It discusses the meaning of customary opinion language, analyzes what can go unstated in an opinion letter as well as what must be stated, describes the work customarily done to support standard opinions and contains a simplified form of opinion letter in § 6.16, Appendix.
Only a few court decisions have been published on third-party closing opinions. None provide much in the way of specific guidance on what lawyers must do to satisfy their duty of care. As a general rule, however, as made clear in the American Law Institute's recently adopted Restatement (Third) of the Law Governing Lawyers,2 lawyers discharge their duty of care in preparing closing opinions when they follow the customary practice of lawyers who regularly render and advise clients regarding opinions of the type involved.
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