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Course Details

Course Information
  • smart_display Format

    On-Demand

  • signal_cellular_alt Difficulty Level

    Intermediate

  • work Practice Area

    Banking and Finance

Date & Time
  • event Date

    Thursday, December 21, 2023

  • schedule Time

    1:00 p.m. ET./10:00 a.m. PT

  • timer Program Length

    90 minutes

Credit Information

  • This 90-minute webinar is eligible in most states for 1.5 CLE credits.

$347.00
CLE
ALL

This CLE course will discuss the issues finance counsel should consider when rendering or reviewing opinions in connection with various types of loan modifications. The discussion will include amendments that add collateral or guarantors, add tranches of debt, or modify borrower ownership structure or loan terms.

Faculty

Steven O. Weise
Partner
Proskauer Rose LLP

Mr. Weise practices in all areas of commercial law and has extensive experience in financing, especially in those secured by personal property, including structured financing. He is regarded as one of the foremost authorities on Article 9 of the UCC. He is a member of the Permanent Editorial Board for the UCC and a member of the American Law Institute’s UCC Article 9 Drafting Committee. Mr. Weise is also the past chair of the American Bar Association’s Business Law Section Legal Opinions Committee.

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R. Marshall Grodner
Member
McGlinchey Stafford PLLC.

Mr. Grodner's practice focuses primarily on commercial transactions, secured transactions, commercial finance, opinion letters, commercial real estate and gaming law. He has an extensive practice representing lenders in large commercial transactions, locally, regionally and nationally. He authored or co-authored articles dealing with secured transactions, commercial real estate and other business law issues, and also presented on issues concerning loan documentation, secured transactions, ethics and professionalism in the transactional context and real estate law.

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Sandra M. Rocks
Counsel
Cleary Gottlieb Steen & Hamilton LLP

Ms. Rocks' practice focuses on commercial financing, including secured transaction and bankruptcy law. She is Co-Chair of the Investment Securities Sub-Committee of the ABA Business Law Section UCC Committee. She also serves on the TriBar Committee on Legal Opinions and participated in TriBar's preparation of its original and updated reports on security interest opinions under Article 9 of the UCC.

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Description

When a loan is modified, the lender will often require a new or updated opinion of counsel regarding authority, enforceability, and other matters relating to the loan. Whether payment terms are being amended, new borrowers or guarantors are added, there is a change in the collateral, new funds are advanced, or the loan is being extended, there are complex issues to consider.

A threshold question is whether the opinion should cover only the amendment documents (or new guarantors or collateral) or whether counsel should also issue an updated opinion on the underlying transaction. Counsel must also determine what kind of backup resolutions and certifications it will require and whether it will need reaffirmations from existing borrowers and guarantors of their obligations under the loan as modified.

Security interests perfected at the initial closing may be affected by the addition or subtraction of collateral or a change in the loan amount. Counsel must decide how to structure a new perfection opinion and identify the additional filings--either on the mortgage or UCC records--that might be needed to support the opinion. Counsel must also consider novation issues.

Assumptions and qualifications are a critical element of the modification opinion. These will likely include the enforceability of the existing loan, no defaults, no other amendments, and other matters. The timing and extent of these assumptions may be influenced by the assumptions made in the initial opinion.

Listen as our authoritative panel discusses the nuances of legal opinions provided in connection with various loan modification scenarios.

Outline

  1. How opinions at modification differ from opinions at origination
  2. What form should the opinion take: new, restatement, update?
  3. Opinion concerns with different types of modifications
  4. Loan terms, change in the loan amount
  5. New borrowers or guarantors (or release of borrowers for guarantors)
  6. New collateral: real or personal property and perfection
    1. New tranche of debt
    2. Extension
    3. Assumptions and remedies

Benefits

The panel will review these and other key issues:

  • When should lender's counsel request an opinion on both the applicable amendments and the underlying loan documents?
  • What UCC perfection issues need to be covered in the opinion when there is new collateral? New debt? A new borrower?
  • What assumptions and qualifications should be permitted to be included in the modification opinion?
  • When should reaffirmations be sought from existing guarantors as a condition to providing the opinion?