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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, November 14, 2024

  • 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 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.

Faculty

Francisco Flores
Partner, Co-Chair Structured Finance Practice
Winston & Strawn, LLP

Mr. Flores focuses his practice on negotiating, structuring and documenting corporate transactions and related financing arrangements. He has represented publicly traded and privately held companies in borrowing and lending transactions, entertainment financing, M&As, private equity investments, public and private debt and equity offerings, SEC compliance, tender offers, venture capital transactions and general corporate matters. In the structured transactions arena, Mr. Flores has represented issuers and underwriters in acquisitions, sales and securitizations in various asset classes, including automobiles leases, commercial mortgages, home equity loans, residential mortgages, life settlements, premium finance loans, lottery receivables, peer-to-peer loans, pharmaceutical receivables, structured settlements, student loans and solar energy receivables.

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Jason W. Harbour
Partner
Hunton Andrews Kurth LLP

Mr. Harbour regularly represents all major constituencies in formal bankruptcy proceedings and in out-of-court restructurings. His experience includes representing corporate debtors, secured and unsecured creditors, parties to safe harbored financial contracts, indenture and securitization trustees, lessors, and other parties in interest in Chapter 7, Chapter 11 and Chapter 15 bankruptcies, and in workouts. Mr. Harbour’s practice also focuses on providing insolvency-related structuring advice and legal opinions in connection with complex transactions for asset based-lending, asset securitizations, safe harbored financial contracts, conduits, derivatives and other financial hedges, project finance, REITS, REMICS, real estate finance and other capital markets transactions.

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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 that help achieve legal separation and bankruptcy remoteness in SPEs are 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 appropriately 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. A true sale opinion addresses whether the assets of the SPE have been appropriately isolated from the transferor of such assets.  This opinion gives the recipient assurance that the risks of a transferor bankruptcy and of recharacterization of the transfer of the SPE’s assets have been minimized to the greatest extent possible. Authority to file opinions and Delaware limited liability company opinions are companion state law opinions that evaluate certain of the bankruptcy remoteness protections.

Listen as our authoritative panel 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.

Outline

  1. Delaware corporate and SPE opinions
  2. Authority to file for bankruptcy
  3. Bankruptcy remoteness
  4. Drafting considerations in rendering substantive consolidation opinions

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, a true sale opinion, an authority to file opinion, and a Delaware limited liability company opinion?
  • What are the bankruptcy risks that parties providing financing to a structured finance SPE can minimize?