TriBar Issues New Guidance for Third-Party Closing Opinions on LLCs
By Ryan J. Maerz, Esq.
The TriBar Opinion Committee (the “Committee”) released the eagerly awaited 2021 revision of Third-Party Closing Opinions: Limited Liability Companies (the “2021 Report”) in Volume 77 of The Business Lawyer. The 2021 Report aggregates and replaces the Committee’s 2006 report of the same name and the 2011 supplemental report regarding opinions on LLC membership interests (collectively, the “Prior Reports”).
The 2021 Report provides thoughtful analysis and valuable guidance regarding the issuance of opinions on LLCs, and seasoned opinion preparers will recall many substantive concepts from the Prior Reports; those concepts have been updated to reflect contemporary ideologies of the Committee and have been annotated with recent case law to support them. The 2021 Report also includes several provisions that variously expand upon or depart from those in the Prior Reports, including provisions relating to the issuance of opinions on Delaware LLCs by non-Delaware lawyers, reliance on the currentness of documents obtained from reliable sources, and status and power opinions in the context of dissolution.
A new subsection in the 2021 Report contains a discussion of relevant considerations with respect to the period before delivery of an opinion letter (e.g., implications of actions purportedly taken by an LLC prior to its due formation). The Committee elected, however, to publish the 2021 Report without addressing opinions on the enforceability of an LLC’s operating agreement; these complex opinions, and their implications, will be subject to further study and discussion.