The Spring 2021 Meeting of the Working Group on Legal Opinions Foundation (“WGLO”) consisted of sessions held on May 4, 2021, May 6, 2021 and May 11, 2021. As with the Fall 2020 meeting of WGLO, the Spring 2021 meeting was a virtual meeting in which all presentations occurred through a virtual electronic platform. Plenary sessions were conducted on May 4, 2021 and May 11, 2021. Meetings of various affinity groups occurred on May 6, 2021. The meetings were not recorded by WGLO (and attendees were instructed not to record the meetings) due to a desire to facilitate discussion among meeting panelists and other attendees, who might be more comfortable if they could speak without attribution.
As a reminder, WGLO (website: wglo.net/) is an organization whose mission, per its website is “… to bring together all constituencies concerned with giving and receiving legal opinions in order to foster a national opinion perspective, broaden the consensus that exists and provide a continuing forum for discussion of opinion issues.” There are three categories of members of WGLO: the ABA’s Business Law Section, law firms and bar associations (such as the ABA’s Section of Real Property, Trust and Estate Law and state bar associations). Among WGLO’s activities is the hosting of a Spring meeting and a Fall Meeting each year.
Lawyers who are partners in, or, employed by, member law firms may, as of the date of this article, access written materials from the Spring 2021 meetings. A log-in and password are required to access the materials. The materials include the meeting’s agenda and written materials relevant to the discussion topics.
Three programs were presented during the May 4 sessions. The first program, “TriBar Report on Limited Liability Company Opinions” discussed the updated report on limited liability company opinions issued by TriBar. The new report updates the 2006 and 2011 TriBar reports on limited liability company opinions. The new report focuses on opinions issued with respect to Delaware limited liability companies. The updated report addressed a number of topics (some of which are not unique to LLCs), including due formation, existence, good standing and due authorization, execution and delivery. The discussion on due execution and delivery noted that due execution and opinions are not necessarily limited to issues concerning the law relevant to the jurisdiction of the LLCs formation, but also might require consideration of the laws governing the reviewed documents and the law of the jurisdiction where the covered documents were delivered. Other topics that were discussed included opinions with respect to the valid issuance of limited liability company interests, opinions regarding the assessment by the LLC of limited liability company interests and the liability of LLC members. In addition, there was discussion regarding coverage of Delaware contract law with respect to opinions given on Delaware LLCs. Another topic discussed was the enforceability of an operating agreement of a Delaware LLC. Some questions were raised during the process of preparing the LLC report regarding the identity of the party with a right to enforce an operating agreement against a member, issues that are not covered in the current draft of the report.
The second program, “Current Ethics Issues Relating to Transactions Practice”, was devoted to professional responsibility issues. The topics covered by the presentation are not necessarily unique to opinion letter practice. Two principal topics were addressed during the presentation. The first topic addressed the issue of “truthfulness” in lawyer communications with others. For example, when does “posturing” become problematic? The second topic that was addressed pertained to new ABA Model Rule 8.4(g) regarding duties with respect to discrimination and harassment. A third topic, pertaining to the remote practice of law, pertained to an issue that came into focus in light of the many office closures and migration to remote working environments during the COVID 19 pandemic.
The final session, “Follow-On Opinions: Advancing the Practice”, on May 4 was a discussion “interactive” session. The program attendees were divided into three groups, each of which discussed the topic of follow-on opinions (e.g., opinions given in connection with amendments to loan documents). This topic was the subject of an earlier WGLO webinar. Each group worked from a common set of hypotheticals dealing with various scenarios pertaining to the amendment of documents in an unsecured financing transaction. The hypotheticals allowed the discussion to address diligence, assumptions and qualifications that might be common across various scenarios and with opinions issued at the origination of the financing, but also when the diligence, assumptions and qualifications might differ.
The meetings on May 6 were devoted to meetings of various affinity groups. WGLO has organized groups within particular practice areas to periodically meet to discuss opinion issues that are of concern to those who issue or receive opinion letters in transactions involving those practice areas. There were six affinity group meetings on May 6; relating to: Capital Markets/Public Securities, Commercial Law and Finance, Corporate/Alternative Entities, Cross-Border Transactions, Real Estate and Private Equity/Venture Capital. The author attended the Real Estate Affinity group meeting. Most of the meeting of the real estate affinity group meeting focused on a pending project of the opinions committees of RPTE, ACREL and ACMA and the WGLO real estate affinity group to revisit the Real Estate Opinion Letter Guidelines of 2003 in light of the Statement of Opinion Practices and the three real estate opinion letter reports issued by the opinions committees of RPTE, ACREL and ACMA since issuance of the Real Estate Opinion Letter Guidelines. Bill Dunn is the reporter for the project, and a steering committee for the project has been established. The update of the Guidelines will not revisit the Statement of Opinion Practices, and the expectation is that the project will focus on real estate-centric aspects of opinion practice as opposed to opinion issues that apply across real estate and other practice areas. There were short reports on the status of the local counsel opinions report underway through WGLO and on the subject of a report on opinions in follow-on transactions. A draft of WGLO’s local counsel opinion report is under review by the committee, and there was some discussion that an upcoming TriBar project might address the subject of follow-on opinions.
The meeting on May 11 consisted of four sessions. The first session, “Takeaway: Opinion Liability, Experts and the Courts”, addressed, among other things, the role of experts in opinion litigation. Experts may be testimonial experts whose role is to testify on behalf of one party or the other. The testimonial expert can provide information to be considered by the trier of fact as to whether or not a standard of care was met. Consulting experts can provide guidance to one party with respect to various aspects of opinion practice and in evaluation of a party’s case.
The second session, “Series LLCs and LLC Series-Opinion Issues”, dealt with opinion issues encountered with series LLCs and LLC series. More than a dozen states (plus the District of Columbia and Puerto Rico) permit the use of series LLCs. The session included a discussion of types of series (series, protected series and registered series). The Delaware Limited Liability Company Act includes provisions that would allow a series to be treated as a registered organization for UCC purposes. The first portion of the program discussed series generally. The remaining portion of the program addressed opinions (including diligence) in the context of a series LLC and LLC series.
The third session, “Nonconsolidation Opinions and Series LLCs”, addressed nonconsolidation opinions in the context of series LLCs. There are currently no cases ordering substantive consolidation in bankruptcy of a series in an LLC with the LLC itself or with another series in that LLC, and it is possible that a court could order such substantive consolidation.
Finally, the fourth program on May 11, “Recent Opinion Developments” addressed recent opinion developments. Most of the time spent during this particular program reviewed recent judicial decisions. These decisions do not necessarily pertain to opinion letters, but rather involve legal issues that opinion givers might be required to consider when preparing opinions.
As noted, the recently concluded Spring 2021 WGLO meeting covered a variety of topics of interest to opinion givers and recipients. The affinity group meetings afforded attendees the opportunity to meet “virtually” to consider issues of common interest. The Fall meeting of WGLO will occur in late October and/or early November 2021, and the Spring 2022 meeting will occur in May 2022.
