Deal Structuring & Legal Opinions
Attorneys in Balch's Creditors Rights and Bankruptcy Practice routinely work with attorneys in other areas of our firm in structuring transactions to minimize the repercussions of a bankruptcy filing. We also issue reasoned legal opinions regarding the non-consolidation of entities, the enforceability of restrictions placed in corporate governance documents on an entity’s ability to file bankruptcy, and whether a sale of assets is likely to be deemed a "true sale" in the event the sellor's insolvency.
With our bankruptcy attorneys practicing across the Southeast and beyond, Balch has considerable experience in observing the practical implications arising out of transactional documents in court. This courtroom experience positions our attorneys to advise on the front end of a transaction to ensure our clients are protected in the event of bankruptcy.
Transaction Structuring: Few, if any, transactions close with the expectation that a party will one day file bankruptcy. However, it is of the upmost importance that parties to complex transactions take precautions to ensure their rights are protected in the event of bankruptcy. We frequently counsel clients and draft agreements in an effort to protect those rights and minimize the impact of bankruptcy.
Non-Consolidation Opinions: Balch attorneys represent real estate investors across the country in structuring transactions to ensure the assets of one entity will not be substantively consolidated with the assets of affiliated entities in the event one or more of those affiliates becomes a debtor in bankruptcy. This work often involves the issuance of reasoned legal opinions regarding the non-consolidation of these entities that meet S&P’s U.S. CMBS Legal and Structured Finance Criteria.
True Sale Opinions: Balch advises clients in the sale of financial and other assets to ensure the transaction is a “true sale” so that it will not be recharacterized as secured financing in the event of insolvency proceedings. This includes the issuance of reasoned legal opinions. For example, Balch gives true sale opinions to banks in connection with the sale of residential mortgages to the GSEs (Fannie Mae, Freddie Mac, and Ginnie Mae).
Authority to File Opinions: Balch represents investors in transactions nationwide in ensuring that restrictions on an entity’s ability to file bankruptcy will be upheld. This work often includes the issuance of a reasoned legal opinion on the enforcement of those restrictions.