Sign Nebraska Arbitration Agreement Simple

Document type sign arbitration agreement delaware simple

so today we're going to talk about legal opinions and this is in some ways gonna really sum up chapter 8 chapter 8 the chapter on authority and legal opinions are evidence of authority and so we need to apply what we've learned over the past two weeks to to this subject matter to really understand make sure that we understand what we've covered so far and so what our legal opinions well they're they're memoranda they're they're actually letters oftentimes sent from counsel to the opposing counsel or the the opposing client in a corporate context and they express the lawyers conclusion as to how the relevant law applies to a fact pattern you know just like what we often do but we're doing this analysis in a corporate context and saying whether or not in action has been authorized or whether or not a statement of fact about a corporation is true and these are often requested by parties to a transaction who want assurance that that transaction is going to be legally binding because as we can see there are as we saw from our last two lessons if an action is not authorized the corporation may not be bound by it and so if your opposite of a corporation and you are in a transaction with them you want some comfort that that corporations actor their agent is actually authorized and I do mean actually I mean expressly and actually authorized to conduct that transaction so it's not retroactive Lee rescinded kind of pull the rug out from under you so to speak so what function does the legal opinion serve they can serve any kind of function but usually it's like a housekeeping matter as and just sort of you kind of look at the records and and certify that the state of the corporate affairs are a certain way at a certain point in time so when the when this boots up yeah there we go it's a little dark but I have an example for you so let's take a look at this first example alright so what do you notice about this well first off the date is in brackets and those square brackets are sort of a tool that lawyers used to denote that we're going to change something later so what what are we gonna put for this so we're contemplating a transaction so what date are we gonna put for this letter so you might think the date your mailing it out right or the date that you wrote it but the relevant date of a transaction what is the really what what do you really care about you know in a transaction yeah the closing date of the transaction is going to be what's really fundamental and so we're actually gonna date this as of the closing date so it's actually not both the date that you write it on and what we're going to be certifying is that a number of things are true as of the date of the closing because that's the date that matters and so I mean look if the corporation had a million shares of stock on Thursday and then they issued another five million on Friday and you bought the company or you bought a million shares on the next Monday you didn't get the percentage that you were hoping for so the letter the certification talking about the capital structure it has to be true as of the closing and so legal opinions are going to be dated on the closing date because they describe a legal situation that must be enforced at the time the transaction is consummated so who do we who do we dress this to I mean other than ladies and gentlemen but you know who are who are we going to actually address this yeah well we actually tend to address it to the other party and their lawyers read it and so the the convention is to address it to the other party but it's really their lawyers that are going to care about it so it is kind of funny we don't address it to the law firm though we actually address it to their to their client the other law firms client and the law firm reads it and the reason that we do it that way is we're actually generally going to limit the effect of this letter to the addressee and we're going to say that only the person that we address this to can rely on it it's only intended for them and so the client can that their client can rely on it and their lawyer will inform the client that it's sufficient and valid and so the lawyer delivering the opinion will tend to limit the addresses and limit who can rely on it to as few parties as possible and normally that is the other part to the transaction the one seeking we call it comfort we're gonna we're gonna comfort them and tell them everything's okay you're gonna get the shares of stock that you bargained for you're gonna pay the price that you expected how does the lawyer describe his role and as you can see the lawyer here describes their role as counsel to the client in connection with the transaction in question and this is relevant because sometimes for example in a merger acquisition you might have a different counsel who performs that merger as opposed to the counsel that represents the company on a day to day basis or represents them in terms of engagement and sometimes a lawyer who is specially engaged just for this transaction might describe themselves in that way and express and make it clear to the other party that their knowledge of the client is limited to the transaction in question and to the documents that they reviewed because as we'll see the lawyer actually takes on some liability for the assertions made in this statement and so the idea is really to try to limit the assertions that you might make so that you you make it to as few people as possible and you say as little as you possibly can because your license and your hopefully you have malpractice insurance but nobody wants to be collecting on that and and that's what's on the line here when you put this together so take a look at this and sort of ask yourself what does a lawyer have to do to give an opinion letter what what is the actual work involved yeah this is the corporate version of DOC review and so the term for this is diligence this is a corporate diligence process so for those of you who have worked in litigation document review means oftentimes you'll you'll make a document request in the process of discovery during a litigation you know between you know you survived the motion to dismiss or they just answer the complaint and that opens a period called discovery where you collect you do your fact-finding you get your depositions and you get a lot of copies of Records and corporate litigation I mean it could be huge huge volumes of Records and those are often digitized and scanned and sorted for responsiveness and privilege so that's one type of document review and that's corporate litigation document review corporate transactional document review you're going to be reviewing internal documents from the company and these will be like material contracts stock issuances other documents that are going to be relevant for you to be able to say that the statements in the opinion are actually true so what we're going to be doing is this document review of a lot of corporate records corporate documents contracts the company is entered into leases sales of stock all that sort of information and sometimes you know you're going to have to as the attorney rely on certifications by the company and so the company has officers there may be things that they know that are not provable by a document trail so you may have the secretary certify that a meeting occurred on a certain date or certify that the bylaws are accurate so there's going to be a combination of documents and certifications of those documents that you'll rely on and oftentimes the documents will be listed it depends really how many there are but sometimes the documents will be listed in order for the attorney to again your this is like total defensive mode here right and the idea is to to limit your exposure to liability as much as possible and by saying we are only opining as to the documents that we actually reviewed which are listed on exhibit a then if there's another document that your client didn't give you you didn't commit malpractice or at least you hope not to have committed malpractice and so it can be a good practice on the other hand if you're on the other side of the equation if you're the one receiving the letter you may not want it to be limited because then you're not getting the comfort that you that you bargained for then we get into a series of limitations and so let's take a look at this one the opinion set forth here and are limited to matters governed by the laws of the state of blah da da da da right new Columbia in this case and made it up and no opinion is expressed herein as to the laws of any other jurisdiction so if you're an attorney practicing in Pennsylvania and you don't know anything about Nebraska law you don't want to be opining on Nebraska law I mean for one thing you know that's a risk for you because you don't know that area of law and and maybe there is something weird out there maybe Nebraska I don't know has some weird version the Uniform Commercial Code which doesn't permit you know some exception for the statute of frauds in the case of merchants and so the fact you don't whatever I mean you just don't know you and and it's not your job to know that unless you're asked to know that and if even if you are you then have to become competent in that area of law it's the extent possible and so you're going to again protect yourself by limiting to the law of the jurisdiction at issue in the case of corporate issues this is typically going to be Delaware and the state in which the party your client resides and so if you're a California lawyer practicing in Silicon Valley with a client that operates there and is incorporated in Delaware you're gonna limit this to Delaware and California law and this gets a little tricky because you know I've done this I'm not licensed to practice in Delaware but the general counts my firm told me that it's it's okay yeah but you don't have to NIST to be licensed to practice law to a pine on what the law is you know you see courts often will deal with the law of another jurisdiction and Delaware is the one that kind of often sneaks in there you have questions John yeah so if the contract is governed by or the client's incorporated in a state where the a pining lawyer is not licensed to practice it may be necessary to have a second law pinion to rely on from a foreign lawyer but a lot of corporate lawyers are familiar enough with Delaware law that they would feel comfortable opining on very certain very limited matters of Delaware law it's getting into a bit of a gray area speak to the general counsel at your firm if you have any questions about the ability to opine on law outside of your jurisdiction all right more limitations right we're gonna keep limiting us based on and subject to the foregoing and further assumptions limitations and qualifications here at after asbestos our opinion that so after we've you know made our our limiting remarks and by the way there usually are more we're not going to go through all them but this is often by the way a form that there's a thing called like the try bar committee on model legal opinions and you can download a form on the internet that has a model legal opinion with all of the possible provisions and usually they're lettered and then we have numbered provisions for the actual opinions but the sort of exceptions and limitations and they can go like a through Z really I mean there could be 20 or more limitations and carve-outs we haven't looked at all of those and then we actually make the opinion and an opinions kind of a funny word it is called an opinion letter but what does this mean actually opinion it's actually a conclusions and conclusions of fact really can fax that you found so you know it's it's it's kind of confusing to call it an opinion because it actually refers to specific opinions or really a really facts and and you're gonna be held to them so the word opinion has a connotation like a belief that's not the it's not the technical meaning here it's it's legal conclusions that you've reached based on your analysis of the documents and also the opinion is the whole thing it's the whole document but the opinion letter has a series of opinions in it so let's take a look at our first opinion the company is duly incorporated Valley validly existing and in good standing under the laws of the state of New Columbia what does that mean yeah so duly incorporated means that means what it says really there was no defect in the incorporation and you know what's funny about this some lawyers won't give that opinion because it's actually hard to to prove I mean how can you actually show that that there was no defect and so this is actually one opinion some lawyers don't always give valid the existing on the other hand how can you prove a company is validly existing yeah yeah you go to the Secretary of State well so you you mentioned you can check their website the website will give you an unofficial information about that company is validly existing but in order to have the kind of comfort that you would need you actually want to order a certificate from the Secretary of State you wouldn't just want to rely on the website you would actually want to go further an order or certificate it's like fifty bucks and then you have to pay a thousand dollars to get in an hour if you're in the middle of a transaction again rush it to you and and what it is it's nice and not nice I mean Delaware can rush documents and they can process things as quick as an hour for an extra thousand bucks or you can wait a week and pay 50 but you're gonna want to have that paper in your hand that is stamped and sealed from the Secretary of State no I don't think you can rely on if you didn't Vout if you didn't personally incorporate this company you should be very hesitant to give a due duly incorporated opinion if you did it yourself and you personally verified those documents coming back on time and you feel comfortable about that but most most opposing counsel will not insist on the duly incorporated part they'll be asked to give a letter at some point in their lives and they don't want to give that either and you know this changes and again there's bar committees that talk about to talk about this some attorneys are more comfortable with doing this than others but it's it's not a preferred practice good can't be certified yes you can say valid the existing because the certificate the certificate will be evidence of valid existence right so as I mentioned some attorneys are not comfortable giving a duly incorporated opinion unless they were personally involved others are more comfortable with it again there will usually be a person at your firm who is like the opinion guru and and it is it's a role I'd like slike a super nerdy like role of the firm be like the legal opinion guy but there's a guy who's like does that and yeah you know or a girl and yeah you know man or a woman and you talk to them and and they will tell you what is the best practices that your firm has has adopted all right what does it mean for a company to be authorized to transact business in a state how do we give this opinion so you have a Delaware corporation you're here in Pennsylvania yeah you have to register like you would for a license you register as a foreign corporation and you have to register for a number of other things you might have to register to have employees Delaware has a process called Dell or one stop where you can get all these licenses Pennsylvania less so every state has their own procedures but oftentimes they will ask for a certificate of registration in every state where the company is doing business and what constitutes doing business I mean that's not just sales remember that it's it isn't just sales actually I think that's an important point because you might have employees in an office somewhere I mean you might have you know four people in an office in Vermont and and they're not necessarily making sales in Vermont they could be you know working on intellectual property processing patents or whatever so isn't just sales it could also be employment but you want to have that that registered ability to do business in states certainly where you have a significant physical presence and there every state has thei own standards for this too so if you you know some some companies really need to register in every state I'm sure Apple has a registration every state in America I mean they have Apple stores right on that type of sales operation with a physical footprint employees products shipments warranties liability all those things would probably have to be registered in every state but most businesses don't need to be registered in every state just somewhere they have a substantial presence at least in office and so in order to do that you're going to want to get certificates from all of those states and so this can take some time and so you know you want to be ahead of this and so in fact when you're going to go through this process if your firm has done this before at least a couple times before they should have a checklist for you to go through and all these things to think about because part of it is you know in order to write this letter yeah writing the letter is easy that's cut and paste what's hard is being able to say these things are actually true which means you have to actually get the certificates which means you have to determine in which States you need a certificate and then you have to order it and then you're gonna find out that your client didn't register in Oklahoma and Oklahoma has some kind of rule that says if you have three employees you have to register and then you got to go and register in Oklahoma and then get a certificate for that and all this has to happen for the closing because the deal doesn't go because you couldn't sign the letter well your clients not gonna like it just put it that way so good to have a checklist and think about this ahead of time all right this one directly relates to corporate and what's interesting here is this really is a Delaware law issue in my opinion although you know I mean if you have a if you have a corporation if you're in Pennsylvania of a Delaware corporation you know whether what you're authorized stock is is going to really be a Delaware law issue but anyway the authorized capital is going to be a really really important opinion for anyone who is interested in buying your company or buying shares of stock in your company because this is telling them what are they getting I mean a share of stock is just a percentage if there's a million shares and you're getting a hundred that's not much there's a thousand shares you're getting a hundred that's a whole lot and so you want this to be true as of the date of the closing if you're investing in a company you want to know what you are getting and so this opinion would rely on seeing a copy of the certificate of incorporation and again you're gonna want to go to Delaware you're gonna get a certified copy of that certificate of incorporation because that's the document that says how many shares are authorized and how do you know how many shares are issued and outstanding so they should be maintaining a stock ledger and so you could look at their stock ledger if your firm has been maintaining that stock ledger that may be sufficient but if you're just taking this client on can you rely on their stock ledger without Moore again your law license is on the line if this is wrong what else might you want to see I mean if you really care about this you're gonna want to see every contract for the issuance of stock and every board resolution authorizing that issuance of stock only the board only the board only the board can authorize the issuance of stock the CEO can't do it and you can't give the CEO that power in the abstract you can't say hey CEO issue stock whenever you feel like it an issuance of stock requires a board action and so we're going to want to trace back every stock issuance to an actual board action we're gonna want to find a resolution either added at a regular meeting or at a dinner to special meeting with quorum and with sufficient votes approving that issuance of stock or any alternative a unanimous written consent by all the directors right that's the only way the stock can be validly issued and there are issues that come up with this so there may be an instance where stock is not validly issued where a deal was signed and the meeting wasn't done properly or wasn't done at all what can you do in that instance that's part of your housecleaning that's that called a ratification you would want the board to ratify that issuance and then it will become valid retroactively Lee so you'd want to have the board have another meeting and by the way they don't necessarily have to have a meeting they might be able to design it you name it a unanimous written consent now they're gonna get really annoyed with you if you have them sign a bunch of these things so what you usually do is you compile a lot of these cleanup issues until a period reasonably before the closing not too close you know you don't but you want to get through as much diligence as you can identify as many problems as you can and then you're going to ask the board to ratify and clean up whatever you can clean up at that point the company is the power it's execute deliver and perform its obligations so how do you know if a corporation has power to enter into a transaction what's the subject of this chapter authorization how does the how do you find whether a company was authorized well it seems like this is a big transaction you know you don't just write opinion letters for fun these are expensive they're hard you put your license on the line you only write them when you have almost by definition in extraordinary transactions and what do we know about extraordinary transactions what do they require yeah you need an action by the board you need an express grant of authority for an extraordinary transaction we're not going to simply rely on the nature of the CEO or the fact that he did something like this before if it's extraordinary we're gonna want to see an express grant of authority a board resolution so in this case this is a merger this is a sale of a lot of stock and amendment to the certificate of incorporation bringing on new investors changing the makeup of the board or a major major shift in corporate policy maybe a huge a huge $100,000,000 revolving credit line or something you know significant like that we're gonna want to see an authorization from the board and we're gonna want to see that they actually sat down and looked at the deal documents if you want to see a resolution that the board adopted and approved the documents attached here to is Exhibit B etc et cetera and we want to know that they went to that paper and process we're gonna see a case of an Gorham and in that case the board approved a major merger in like two hours and later there were some real questions about whether that was a breach of the duty of care all right we're gonna get to duty of care next semester and in the Smith V vanwoerkom case we had a potential breach of the duty of character they didn't spend and actually have this out of this picture that I put on one of the slides for a while after that you'd have the council like stand over the shoulder of the board members and be like alright now turn to page 634 initial six thirty five initial you know to make sure that they were going through the proper we call paper and process that it was authorized so it actually is significant that the board look at the documents and have some authority that that comes not just from mere words but from from some actions so we have to find then that grant of authority and it also is saying that this is within the scope of what the company can do so this can't be anything illegal and and things like that although there are other opinions that capture the legality component right and we really care about this Authority concept so there's also gonna have an opinion that the company has authorized delivery and performance the transaction documents and this means that the corporate actions opinion this is called the corporate actions opinion means the company has taken all the steps it needs to to author is the signing of the documents the act right because you have to have a human being corporations don't have arms right they don't have hands you need a human being with with with a hand with a pen in it to literally sign a document and that means you have to authorize that particular person to sign that document so you're gonna want to see language to that effect in a resolution and we're gonna want to see an a grant of actual Authority right the fact that we're in the world of legal opinions this is not an ordinary transaction we're gonna want to see a grant of authority so what does the lawyer look at the lawyer might look at the articles the certificate of a corporation the Secretary of State Records corporate articles bylaws board resolutions secretary certificates the transaction documents it's a lot of diligence involved here a lot of looking through the corporate records for evidence of authority all right so this is called the remedies opinion and it says the agreement can constitutes legal valid and binding obligation of the company and it's enforceable about against the company so it's called the remedies opinion saying that if the company breaches it there will be a remedy for the other party you can see why they would want that they want to know that this is an enforceable contract and that they have rights at law if the other side breaches and so this means that the document in question is legal that the legal requirements for the formation of a contract have been met by the way I teach contracts so I talk about this a lot but what does the contract require offer acceptance and consideration all right and we're not gonna look for a substitute here we want to see clear evidence of all that now there are some weird transactions out there where corporations to try to basically have contracts without consideration and they use magic words like for good and valuable consideration where there is none those become real issues here right you're giving stock to somebody and they're not actually paying and you know so there is a tendency in legal practice for attorneys to try to use magic words they don't seem to understand that the doctrine of consideration is real and that courts actually will refuse to uphold contracts that do not have consideration a bargain for exchange so some and sometimes it's it's can be so stuff like $1 for a million shares of stock and they think that's going to work is now it's a dollar that's nominal consideration that's not consideration courts you can see through that so that comes up in here too so if you're if you're opining on this look it's not a big deal if you're selling a company for ten million dollars there's consideration right there's the company and there's ten million dollars as a bargain for exchange don't worry about that but if it's more like giving away a huge amount of stock to somebody's nephew that's not necessarily binding there's not necessarily a remedy and you're putting your license on the line for a contract without consideration so don't forget the contracts require consideration we're also then saying that the contract is valid and by that we mean that the agreement is complete that it's not so vague or confusing that a court would refuse to give it effect so we should be comfortable that the contract meets those standards of a contract that that it's a it's sufficiently definite that it's binding in the sense that there's no public policy against it I mean if this is the contract for the assassination of somebody's uncle that's not binding all right courts are not going to enforce that that's not that's not a it's against public policy and so I mean that's not usually the type of thing you're writing an opinion letter on and so this doesn't usually come up but there can be other issues too someone's trying to sell stock and it's to a foreign national there are some issues that come up with that there are some issues with selling stock to investors in China so you know those kind of things come up and you need to make yourself aware of the issues there you may need to get foreign counsel if you have a transaction like that because there are some laws that prohibit certain international transactions securities law as well I mean you know you have to if you if you're issuing stock and it doesn't comply with securities regulations so a lawyer who is writing this opinion letter has to be comfortable in a number of areas of law there could be issues about employment that come up with a merger it could be that you're in addition to buying the company if there are certain people agreeing to stay on and work for a period of time not all contracts for employment are enforceable not all non-competes are enforceable so you have a lot of various issues that could come up here and all those need to be vetted in order for you to give this remedies opinion which basically the bottom line says this is an enforceable contract and so you need to be comfortable that it is all right this one's a little longer so take a minute and read it this is called the no violation opinion or the no violation of law than you so one thing to particularly notice about the no violation opinions again we even have a more specific qualifier here right that we're only talking about information that is known to us known to the lawyer granting the opinion and we're not opining two things of which we do not have knowledge and so we're trying to again limit our liability for saying things that we can't verify and so this opinion means the opinion air has examined the document in question and compared it to the company's certificate of incorporation compared it to the other agreements and to the court orders listed in the officers certificate and found that there is there is no conflict and this is permitted under the bylaws is permitted under the certificate and this again gets complicated so you've only seen a very simple certificate of incorporation but we talked a little bit about preferred stock so if you have preferred stockholders this is your Sirius B this is your opinion letter for Series B that means you had a Series A the Series A shareholders might have gotten certain voting rights they might be out of veto a Series B transaction in fact they almost certainly will I mean generally they're going to ask for that they're not going to allow the common shareholders on the board to go ahead and sell series B at any price they're gonna want to maintain some control over the future issuance of stock or at a minimum they're gonna want to have some control over the amendment and Restatement of the certificate of incorporation because doing so can reduce the rights that they bargained for which are in that document so they probably have a veto right as a class as a class of preferred shareholders as a series of preferred of series they have that veto right and so the transaction if it doesn't have the proper number of votes would violate the certificate of incorporation so it doesn't violate law but it violates other documents and so there's no violation opinion means you have to have read the certificate you have to have read the bylaws and you have to may at some point you're gonna have to actually count the votes and make sure that we get to the numbers that we need to have that approval and to make sure we understand all the mechanics and who you know who's protective provisions are triggered in this transaction and so for this we're going to again have to read the certificate of incorporation as well as other agreements that the company may have entered into all right then we have the no violation of law opinion and this complements the remedies opinion and it provides additional comfort and so it may seem redundant but there's a lot of redundancies built into these documents lawyers love redundancies we love belts and suspenders and then whatever else I don't know elastic waistbands I know she adds who belt the suspenders kind of like that actually felt suspenders and elastic waistbands so you have you know various various levels of protection to keep the company's pants from falling off so this violation of law opinion or the no violation of law of pinyon says that the execution and deliv ry by the company of the agreement and performance by the company of its obligations do not violate statutory laws or regulations and of course this would include securities regulations as well as state law and so you have to become comfortable that that is in fact true and it should if you can say that provide comfort to the other side that this transaction is valid we're not done yet we have more opinions next one this are on two am here what does the this opinion cover this is called the no approvals or consents opinion so take a look at that and what does it do yeah so what type of stater approval might be needed for a transaction to occur oh for sure yeah if you're if you're a certainly I mean energy is a great example that mergers in in areas like you know mergers of a power plant or something like that they might be public-private partnerships even you know another area which is similar is like any kind of concentrated area like if Verizon wants to buy AT&T the government is going to get involved it's called antitrust and you're gonna have a pre merger approval process for that and in fact there are thresholds for that and so if you're a company I don't know the threshold so they change every year kind of with inflation but there's a concept called a hart-scott-rodino pre-merger notification you have to file it and get approval in clearance or you're the torah expiration of 28-day waiting period if the companies are of a certain size and there's a number of other factors and so right you're dealing with a large merger you now need antitrust counsel and that antitrust counsel needs to either verify that you don't need a pre merger clearance or you need clearance now what can you do if you need clearance can you make this opinion yes you can and you do the same thing like you would in the disclosure schedule if a representation or warranty is not true you don't strike it you have a disclosure schedule and then you have that sort of like an attachment or an addendum to the reps and warranties similarly here you could have a mention of consents or approvals that are required so you'd have this opinion and then you would usually have a carve out and you would say except for you know hard Scott merger hart-scott-rodino pre-merger clearance and by the way that should be something you vet with the other side well in advance and these big mergers usually have provisions to deal with that and so they usually have some type of risk shifting language so if the clearance doesn't happen one party pays the other a billion dollars or something like that some some type of provision like so one type of consent that's often required which is kind of oftentimes really hard to get and this is just a little weird is a consent from a landlord so landlords oftentimes just have a provision in the lease that Elyse has like a no assignment provision in fact if you have a lease it probably has a no assignment provision check your lease when you get home I'm sure you're all going to do that right but it probably has a no assignment provision which means that the landlord would then have to consent or waive that provision and if there's a change of control of the company it depends on how the merger is structured but literally a co Rica dink landlord could totally screw up a major merger by refusing to give consent and so this no approvals or consents opinion deals with that sort of thing so it's not just the federal government but the rinky-dink landlord and and especially because some of them you know it's like some guy has like you know part like compartment like four commercial units and he's just not checked into this process and you've got some seven billion dollar deal and there's like some guy named Jack who like just won't answer the phone and doesn't have a fax machine and seriously like something you have to deal with so you want to get ahead of that you want to get ahead of Jack without a cell phone and a fax machine because otherwise you can't give your remedies opinion sorry not your remedy syrup in here no your no approvals or consents opinion next we've got an opinion that says the opinions expressed above are subjects the following assumptions qualifications and limitations now done different ways sometimes the limitations are first and this depends on how your firm does it use their forms don't reinvent the wheel I got in trouble doing that by the way I did I walked into a corporate law practice from litigation practice and so I had experience but not the right kind of experience and like one of the first assignments I had should have been really simple was like draft a restricted stock purchase agreement like the one we saw here and as you've seen now and as I now know you just like either go to the website and you and you've put stuff in a form and it spits out a 20-page document for you after you filled in like ten fields or we didn't have Hot Docs back then cuz you know this is ancient history like 2009 or something and so what you do is you ask the partner for a precedent meaning a form that was done last time so I didn't really get the concept and so I started like reading through it and like changing everything and just he just wanted me to change the names and the numbers and the date you know and he's like I've read the 700 times and you've been here for three days and you've just taken my my document and shredded it and you don't know you're doing so don't do that just use the form of opinion letter and so if they if it has the limitations before that's fine if it has limitations after that's fine after 17 years of the firm you can join the opinions committee and change the letter all right so now in this particular example will now move on to the lettered provisions and talk about the limitations and again this is in order to Tec the the attorney who's writing the letter and there are some situations where the legal outcome is just not easy or even possible to predict and so the opinion givers knowledge of the company could be incomplete or you might have to assume certain facts and as a result you're going to want to lay that limitation out so that you aren't found liable if it turns out not to be true and you just can't verify it and these usually are contentious because counsel on the other side is going to want to strike your limitations and you're gonna want to add all the limitations and so there's this like really kind of very like it's it's it's it's it's a nerd war I mean it's like the opinion committee chair versus opinion committee chair fighting about limitations and qualifications and the client is like just give me my seven billion dollars already so here we have one thing very hard to a pine on is bankruptcy and so take a look at this carve out this limitation so I don't do bankruptcy I don't anyone here has taken a course in bankruptcy but it's its own world I mean you have your own procedure you have your own courts and there's a lot of uncertainty about how bankruptcy is going to shake out it's kind of like an arbitration it's kind of like a litigation it's kind of a mess and you really it would be really hard to predict how a particular bankruptcy decision will be rendered and so we're gonna really try to protect ourselves that we're not bankruptcy lawyers and so we're gonna add this carve out in here because of the uncertainty in bankruptcy and I you know I go over this a lot more in contracts class but whenever you have equitable remedies you know estoppel doctrines and things like that and you have the reasonableness standards and what justice requires what the heck is that what justice requires do you know I mean some judge is gonna tell you but judge a and judge B will have different opinions about what justice requires this judge will say justice requires the enforcement of this contract pay him even though there was no consideration this judge says the next appellate court up flips it and says you know that undermines the purpose of the consideration doctrine it's not enforceable okay I mean you see these cases all the time and then you just don't know how they're gonna they're going to end up and so we're gonna want to ourselves from liability as the law of equity is is messy because it's an area where the judge has a huge amount of discretion and we aren't going to be able to say with strict confidence how things will turn out so we have that bankruptcy limitation then we're going to have a couple additional exceptions relating to attorney fees and arbitration and again this is another area where there's a lot of uncertainty and how do you predict how an arbitration is going to come out there it can be you know multifaceted and there's not necessarily strict precedent that will govern the conclusions of the arbiter or even who the arbiter will be I mean there's a lot of conversation about arbitration clauses and there enforceability they dramatically affect the balance of power in a knot in the litigation but in a in a dispute and it's one of the reasons why large companies love what by the way why do huge companies love arbitrary arbitration clauses sounds we being a really bad joke but I don't have a punchline yeah so for one thing they can choose the venue and they often get repeat customers with the arbitrator and so they get to choose not as a venue but the arbiter right and so that's really helpful yeah other reasons yeah you know I've got a trial so it's cheaper but you know what that could cut both ways because maybe the big corporation can afford trial better than the little guy but not a certain type of trial it precludes so III think my own personal conviction on this it eliminates the risk of class action and so class action is the one time a class action is designed to allow a lot of little folks to gang up against the big guy well the big guy doesn't like that right the big guy wants to fight a little bunch of little ants that you can squish and not a huge consortium and so you see companies fighting really hard to maintain their arbitration clauses because each arbitration is handled on a one-off matter there's not a class action concept in arbitration but for the points you raised as well they get to pick the arbiter they get to pick their jurisdiction in many cases and and and and they have these contracts of adhesion these form contracts that are hugely asymmetrical and favoring the large company in any event we're going to try not to opine on arbitration I don't know anything about arbitration I've never been in arbitration I didn't even take an alternative dispute resolution resolution course in law school so I'm not going to touch this one I'm hoping I can get away with this limitation no litigation alright now this is sort of interesting you can do a litigation search but we're going to want to try to put this in here in addition we advise you that our to our knowledge there is no action proceeding in law or equity except as listed below now what's interesting about this provision is by limiting it to our actual knowledge it creates what I call the ostrich effect where we're like don't want to look for it this also pertains to trademark claims I mean if you actually have knowledge of a trademark infringement there's much more heavy penalties and damages so you don't always want to look so this creates a kind of sometimes a bit of a perverse incentive yeah yeah so yeah right you only limit the only limit the the litigation clause to ones that we you the firm actually represent and you won't do a litigation search I mean the thing is you start doing litigation search it opens a whole can of worms and there's a lot of jurisdictions there's not a there's not a straightforward ways I'm sure you know to search all the litigation in America I mean there could be some state court that doesn't have electronic filing and isn't on pacer every single state court yeah Allegheny County has pacer has electronic filing but even the ones that have electronic fun they probably all have different systems and like it's so annoying have I can't remember my password can you imagine remembering all the passwords for all the all the state court set and you probably have to pay and register for each one you might have to certify you might have to Pro Hawk VHA into each jurisdiction I mean it's just it's not feasible there's no system to do that and you don't want to do that and I think in a way we want to keep that unfeasible so we don't have to give this opinion so it's really hard to give that opinion and it's a good practice to limit it to not just our actual knowledge but but that our firm is involved with but there is this sort of issue that kind of comes up in a couple areas the law here and trademarks and a few others where you actually create an incentive not to look for trouble and you know we can have a policy conversation about that another day now as I mentioned you're going to address this to someone in particular and then you're gonna close it by saying this opinion letters delivered solely for your benefits the address see in connection with this transaction and it may not be used by any other person or for any other purpose without our prior written consent in each instance and why would you give it so our opinions expressed herein are as the date here of which again what's the date here of the closing date of the transaction because that's what they care about and we undertake no obligation to advise you of any changes in applicable law or any other matters that may come to our attention after the date here of so we're really trying to limit only you can use this with all these limitations only to the extent that we've made these specific opinions and we're not going to refresh this we're not going to continue providing you with updates so we're always going to find this language in here what happens if there is an error in law well it turns out that it depends I mean a mistake and a minion letter is not necessarily fatal it can lead to malpractice liability for the erring lawyer and for the law firm but it doesn't necessarily to collect damages on an opinion letter with a mistake the disappointed party has to demonstrate the opinion was negligently rendered all right negligently rendered and that losses were proximately caused by the negligence so kind of a common standard it's sort of a tort style standard in order to have a liability for an error in an opinion letter the disappointed party has to show first that the opinion was rendered negligently and that the losses that were born by the disappointing party disappointed party were approximately caused by the lawyers negligence so it's kind of like duty breach caused damage so that's one reason why we're going to spend a lot of effort showing that we were not negligent and so having a firm having a committee that's going to review this is going to be often standard practice and procedure having a checklist and having the associate certify and having someone verify you know having kind of multiple checks I other things I mean lawyers tend to be very cautious about this sort of thing and very cautious about avoiding liability may be too cautious by the way heard an interesting paper the other way about whether lawyers add value as CEOs and the answer is it depends if it's a firm that gets huge litigation that breaks the company like Pharma a CEO can who's a lawyer can really add value but in most of the cases they don't most of the cases they end up decreasing firm value and it's not a good idea to hire a lawyer as a CEO they're just too cautious they don't take the type of risks that you need in most businesses that aren't heavy on litigation but it kind of makes the point that lawyers are very cautious as a rule and opinion from from my experience the chair of the opinion letter committee is the most cautious of them and so there tends to be a huge amount of process involved with these letters and so in truth very rarely do these letters result in actual liability for big law firms they have a very formal process well so the question again was how long does it take to write one of these not just to write it but to do all the diligence involved it can it's so variable I mean if you have a company like I mentioned going through a series B financing the 're pretty young they probably don't have hundreds and hundreds of offices and landlords to worry about but you get a company like Apple right which has you know it could have you know I don't know how many stores you think Apple has you mean thousands thousands and thousands and each one of them you have to read the landlord agree right so you get these mega mergers and you need hundreds of attorneys and you need someone to manage teams of hundreds of attorneys for this thing to get turned around in any reasonable time but these things can happen quickly it's - it's called tying out like all of the stock issuances getting all the stock insurances to relate back to an actual board and then the and tying that out to the the actual stock document and finding the certificates and kind of getting it all organized you have to if you really love organization and and you just you just if you love Microsoft Excel and organization this is pretty cool so how many hours it depends some of these deals get do get put through pretty quick um look there's a lot of jokes about the lawyers get paid too much money but the truth is there aren't a lot of people in this world that can do that and when you need to have a transaction for seven billion dollars completely reviewed and edited and audited and then taken care of an in a three day window you know or at least to the point where you get to signing it helps if there's a separate sign in close and there are other kinds of aspects that you can you can do to build in a buffer if it's just not possible but yeah I mean it's I think it's really impressive I mean I that's one reason I love corporate work and I really respect you know real corporate attorneys because they it's it's an incredible skill to have that type of management prowess I think the financing is easier than a merger because in a financing you don't have a change of control and so you don't have a concern like with the landlord's like the rinky-dink landlord jack with no cell phone and no a fax machine who has four office buildings that one that you rent from you don't have to deal with him because there is no change of control it's really just about the authorized capital and even for a very very large financing you know they're there they're not concerned and oftentimes you'll have repeat players and so by the time you get to your Series D financing and you're getting a hundred million dollars from andreessen horowitz or whatever benchmark ventures you know they're they're going to have been with that company and they're gonna be on the board and they may not require this level of comfort either and they don't want to cause that expense because it's much more of a ongoing relationship and they don't want to have fifteen thousand dollars or forty thousand dollars spent on generating this opinion letter so I mean that's opinion letters and I think that it really kind of brings together a lot of these concepts about authority and and I think it gives you a sense of real a real world sense I hope of what it is like to conduct this operation it can be really exciting and thrilling it can be really my numbing ly boring it could be 2:00 in the morning and you want to go home I think it's true of a lot of different areas of law practice you know I guess kind of as you know con kind of closing this up in conclusion I would say that you know corporate practice is not for everyone but I think it's a really exciting area of the law because you get to work on these huge transactions and everyone wants the deal to get done I mean there is other sides but we're all working to a common goal both you and the other law firm want the deal to close and nobody wants to be the one who blows it up at the same time you have this responsibility to your client to really verify that everything is accurate I think it's good for people who like working on a team I mean you have to figure out a way to work with a lot of different people and you've got your support staff and you've got your paralegals and you've got your partner's and you've got the partner over in the IP department who you need to get stuff from who may or may not be getting paid enough in his opinion for this and you've got some landlord in Kennebunkport who doesn't have a fax machine that you got to convince him to sign something he doesn't understand in order to get a seven billion dollar doodle close where he's not getting a dime and you know you've got technology to work with and a share room and you know maintaining a paper trail and and negotiating on even the opinion letter itself and and what needs to go in the opinion letter and trying to identify who it is that you need to talk to in order to to limit it to the extent you can to reduce costs and so you a lot of different a lot of different constituents to think about and a lot of different areas of work I mean it's not all just M&A that's one of the bigger areas but you know you saw also the incorporation aspects and you know working with the founders and the CEO and I mean it's great I mean they're they're really happy I mean closings like a fun thing they used to give little deal toys like you'd close and there'd be like a little usually like what's a colleague's like those plexiglass things you know you probably seen those at the office right yeah a little glass cube is like a hologram in it says like 1 billion dollars or something and you know that's what you get it you know it's kind of it's kind of like it's kind of like how the firm if you work 200 yards in a week you got a tuner a 200 if you were tuning for the hours in a month you'd get a tuner figure gift certificate for a rest and so you know if you if you if you if you spend a thousand hours and you close a seven billion dollar merger you get a little acrylic toy gonna put it on your shelf so you know it's not for everyone but I hope that this course has at least expose you to kind of a new way of thinking and some some new concepts as well as given you a you know foundational knowledge for the bar exam and prepare G for next semester so we'll come back next week and have a kind of a Q&A session and wrap up for the exam but for now thank you