Model Closing Opinion Letter (Annotated) - American Bar Association

2 Model Closing Opinion Letter (Annotated)
(c) A Corporate Power Opinion may be requested concerning the
question of a subsidiary’s power to guarantee the obligations of
its corporate parent. See, e.g., Del. Code Ann. Tit. 8 § 122(13);
Pa.B.C.L. § 1502(a)(6) (and the definition of “distribution” in
Pa.B.C.L. § 1103). See TriBar Report § 6.3.
3. Authorization, Execution and Delivery
3. The Company has taken all corporate action necessary to
authorize the execution, delivery and performance of each of the
Transaction Documents, and has duly executed and delivered
each of them.
Note: See Pa.Op.Report Part I, Section 4; TriBar Report
§§ 3.5.2(b), 6.4.
4. Remedies Opinion (Opinion 4)
Note: Meaning of Remedies Opinion.
Glazer 11 states that
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“An enforceability opinion provides comfort to the recipient
that, subject to express and customarily assumed exceptions,
(i) the company has taken the steps required by corporate law
and its charter and bylaws to bind itself under the agreement.
. . . and (iii) the terms of the agreement, as they apply to the
company, will be given legal effect.”
In other words, in the event of a material breach by the Company, a
court would give effect to the obligations of the Company in the
agreement, either by requiring performance of those obligations as
written or by granting the other party money damages or some
other relief.
It is important to note that the assurance provided by the Remedies
Opinion is subject to certain standard qualifications and any express
exceptions stated in the Opinion Letter. The standard qualifications
set forth in the Model Opinion paragraphs 4A or 4B (pp. 77
to 79, below), are the bankruptcy and insolvency exception and the
11. Glazer § 9.1, at 209.