Opinions are normally published in these jurisdictions at the request of the court, and to the extent that they contain statements about what the law is and how it should be interpreted, they reinforce, modify, set or remove a precedent. If a court decides that a notice must be published, the notice may be included in a volume of a series of books called Law Reports (or journalists in the United States). Published court opinions are also collectively referred to as case law and represent one of the most important sources of law in common law legal systems. Legal advice is often sought in cross-border transactions, particularly transactions involving the acquisition of companies, lending and securities transactions, and real estate purchase transactions. For example, if a transaction involves a Luxembourg entity, the lender may seek legal advice from a Luxembourg law firm to confirm (among other things) that the Luxembourg company is validly incorporated and registered and that the documents it receives have been duly signed and are binding and enforceable. Despite the increasing effectiveness of due diligence, the fact remains that some transactions require legal advice due to the particular circumstances of this transaction. However, the old habit of seeking the advice of a lawyer as a condition of closing and then letting lawyers negotiate the terms of the transaction at a later date may soon become obsolete. Legal advice is often obtained as part of a banking transaction, but its importance is often overlooked. This blog explores the purpose of legal advice and when a lender may need one. Subsection 13.4(1) of the Bankruptcy and Insolvency Act ("BIA") concerns a trustee acting as receiver and receiver or representative of a secured creditor. Before acting on behalf of the secured creditor, the trustee must obtain written advice from a lawyer (not acting on behalf of the secured creditor) that the security right is valid and enforceable against the bankrupt`s estate.
The purpose of a legal opinion under section 13.4(1) of the BIA is to reassure the trustee as to the validity of the security to be asserted. The opinion given to a trustee under subsection 13.4(1) of the BIA focuses on the date on which the specific security right was made effective against third parties (or not), as the crucial question is usually whether the security was made effective against third parties at the time of bankruptcy. Property assessments generally involve both ownership of the land and the registration of a particular charge (for example, a mortgage) on the title. In terms of headlines, opinions can certainly be based on proper research. Most sophisticated law firms have a detailed backup search and internal approval process for the preparation of legal opinions, which will increase the transaction costs of the business. Businesses may not want to incur costs for legal advice, otherwise these funds could be used for business growth. In general, the smaller the amount raised through funding, the less likely it is that an opinion will be appropriate. The level of due diligence required to prepare a legal opinion is often the same, regardless of the size of the transaction. If the amount of the transaction does not warrant an expensive notice, the attorney may contact the opposing attorney to discuss whether certain issues such as proper authorization, execution, and delivery of documentation can be accepted to reduce costs for the client. In addition to a BIA notice under subsection 13.4(1), there may be a number of other scenarios in which legal advice may be required, whether formal or otherwise.
All opinions relating to securities are subject to numerous restrictions, including the following: Sometimes it is not possible for the person seeking expert advice to adequately inform counsel of the importance of the matter or to provide full access to the required information for reasons of confidentiality. In these circumstances, the expert opinion may contain language limiting the lawyer`s liability. Such an opinion is called a qualified opinion. If the reservations applied to all the opinions expressed, it was acceptable to state the opinions and then list the reservations in a list or in subsequent paragraphs. Invalid or questionable? – Correction of deficiencies in stock issuances under Delaware law v. Stephen Bigler and Seth Barrett Tillman, 63(4): 1109-1152 (August 2008) It is not uncommon for the stock records of a Delaware corporation to contain omissions or procedural deficiencies that raise questions regarding the valid approval of some of the outstanding shares. Faced with such irregularities, most corporate lawyers would likely attempt to remedy the deficiency through ratification by the board of directors and, if necessary, ratification by shareholders. However, in a number of landmark cases, the Delaware Supreme Court has considered the legal formalities for the issuance of shares as substantive conditions for the validity of the shares issued, and the court has held that failure to comply with these formalities invalidates the actions in question, i.e.: Not curable by ratification. Unfortunately, Delaware court decisions have not provided the certainty necessary for practitioners to decide whether a particular error in inventory issuance is a material defect that invalidates inventory levels or a purely technical defect that makes inventory levels voidable. This article analyzes the cases that have led to this ambiguity and suggests that Delaware courts apply the policy underlying Section 8 of the Delaware Uniform Commercial Code to validate actions in the hands of innocent buyers to determine whether the actions are invalid or objectionable. Opinion on the role of normal practice in preparing and understanding third-party legal opinions 63(4): 1277#151;1280 (août 2008) Assurance négative dans les offres de titres (revised 2008) Rapport du Sous-comité des avis sur le droit des valeurs mobilières, Comité sur la réglementation fédérale des valeurs mobilières, Section ABA du droit des affaires, 64(2): 395-410 (février 2009) Special report on the preparation of substantive consolidation opinions The Structured Finance Committee and the Bankruptcy and Corporate Reorganization Committee of The Association of the Bar of the City of New York, 64(2): 411-432 (février 2009) The Role of Lead Counsel in Syndicated Lending Transactions Reade H.
Ryan, Jr., 64(3): 783-800 (May 2009) Lawyers and law firms have acted as lead counsel in syndicated loan transactions for many years, but without much direction, written or unwritten, regarding the duties and responsibilities of senior counsel. In this article, the author argues that he understands these duties and responsibilities based on his own experience and opinions. The author answers the following questions regarding the duties and responsibilities of senior counsel: In general, there will be a list of assumptions on which the preparation of the opinion is based. All assumptions and aspects on which they are based must be indicated in the opinion. Of course, assumptions should only be made in respect of facts that the lawyer knows or has reason to believe are accurate. To some extent, the use of assumptions stems from cost considerations – a client will often have considerable knowledge of the facts of the case in question, but will not want to pay for the service required to verify those facts. Lawyers can only give legal advice on the law of the States in which they are admitted. Accordingly, in some cases, such as where corporate borrowers are organized in more than one State or real estate guarantees are located in more than one State, additional opinions of local attorneys in those other States may be warranted. These costs can add up quickly, so lenders and borrowers should consult with their lawyers and consider their respective arguments as to whether the added value of these assessments outweighs the costs. Although the forms vary widely, most legal notices contain the following: This article contains only general information about legal issues and developments and does not constitute specific legal advice. For more information, please see our disclaimer. No to any question.
Legal advice is not provided in all U.S. venture capital financings, and they are much rarer in large non-U.S. venture capital jurisdictions. Even in the transactions where they are given, the content is negotiated between the investor advisor and the company advisor and varies somewhat from transaction to transaction. Whether or not an opinion is issued and whether the content of the opinion takes into account the specificities of the company, the transaction and sometimes the investor. A legal opinion will usually contain the following: Whether or not an expert opinion should be necessary is sometimes debatable.