IN OUR OPINION THE NEWSLETTER OF THE LEGAL OPINIONS COMMITTEE ABA BUSINESS LAW SECTION Volume 16 — Number 2 Winter 2016 – 2017 James F. Fotenos and Susan Cooper Philpot, Editors CONTENTS From the Chair .......................................................................................... 1 FUTURE MEETINGS ...................................................................................... 5 BUSINESS LAW SECTION 2016 FALL MEETING........................................... 7 Legal Opinions Committee .....................................................................7 Audit Responses Committee ..................................................................9 Law and Accounting Committee .......................................................... 10 THE LITIGATOR’S CORNER ....................................................................... 11 Just Say No? Managing the Litigation Risk of Refusing to Give an Opinion ............................................................... 11 LEGAL OPINION REPORTS ......................................................................... 14 Chart of Published and Pending Reports .............................................. 15 MEMBERSHIP ............................................................................................. 18 NEXT NEWSLETTER ................................................................................... 18 Addendum, WGLO 2016 Fall Seminar ................................................. A-1 2017 American Bar Association ALL RIGHTS RESERVED In Our Opinion Winter 2016-2017 Vol. 16 ~ No. 2 FROM THE CHAIR I am pleased to share with you the Winter Fall 2016 WGLO Seminar. This issue 2016-2017 issue of In Our Opinion. As I includes the semi-annual Addendum containing watched it come together over the holidays and summaries of the programs at the Fall Seminar the past few weeks, I was reminded of the of the Working Group on Legal Opinions incredible dedication of our editors, Jim Fotenos Foundation. These summaries have been edited and Susan Cooper Philpot. Four times a year, by Gail Merel, with assistance and input from without fail, they gather a wealth of content to Jim, Susan and others. It was the usual team share, curate it, and generally herd a large effort, with content that continues to get more number of cats for the benefit of all members of impressive with every WGLO seminar. our Committee. Pure clockwork ― they make it look easy, but it is hard work. We owe them a Fall 2016 Meeting of the Committee. We huge debt of gratitude. had a successful Fall Meeting in Washington, D.C., in November, including a well-attended The Williams Case: Failure to Deliver a and highly substantive program, which our Closing Opinion. We welcome the return of The Committee co-sponsored with the Subcommittee Litigator’s Corner with a note by John Villa and on Securities Law Opinions of the ABA Craig Singer on the risks lawyers face when Committee on Federal Regulation of Securities, delivery of their closing opinion is a condition to titled “Exchange Act Rule 14e-1 Debt Tender consummating a transaction and they conclude Offers: Legal Opinions and Practice Issues.” that they cannot give the opinion. Those risks The panel, which included seasoned were brought into sharp focus by The Williams practitioners and a senior member of the SEC’s Cos., Inc. v. Energy Transfer Equity, L.P., which Staff, covered a host of practice topics for was the subject of an article in the Summer 2016 structuring these highly technical transactions, issue of this Newsletter. The law firm was not as well as the key points of a forthcoming report sued in Williams and the Chancery Court on legal opinions delivered to dealer-managers dismissed the breach of contract claim, finding, in debt tender offers. among other things, that the law firm had acted in good faith in refusing to give the opinion that At our Committee’s meeting we discussed was a condition to closing because of its the progress of the joint project of our reasonable analysis of the tax laws. The Committee and WGLO on the Statement of decision is on appeal to the Delaware Supreme Opinion Practices (the “Statement”) and Court. The Williams context, however, approved for distribution to bar and other highlights that there is risk both in refusing to opinion groups the Core Opinion Principles give an opinion that is expected to be given and (Working Draft, dated October 4, 2016) (the in giving an opinion that the opinion giver is not “Core Principles”), a concise statement of key comfortable with. The greatest risk usually opinion principles drawn from the Statement comes from actions that hurt the client, as that is designed to be attached to or incorporated opposed to a third party, because the client is in by reference in opinion letters (as some firms do privity with the lawyer and can sue for now with the Legal Opinion Principles). Both malpractice. The third party recipient, however, the Statement and the Core Principles are also has privity when the lawyer gives an accessible from the front page of our opinion and can sue if it relies to its detriment on Committee’s website under “Discussion an erroneous opinion that was not prepared with Documents.” reasonable care. In addition, if the third party sues the client and the client loses, the client may then seek indemnity or contribution from the lawyer. The article offers helpful advice on how lawyers can assess and manage these risks. In Our Opinion 1 Winter 2016-2017 Vol. 16 ~ No. 2 Spring 2017 Meeting of Committee. varied and important to large swaths of Speaking of meetings, please do not forget to practicing lawyers as at any time that I am aware register for the Spring Meeting in New Orleans of, benefitting from the experience of a high on April 6-8, 2017. As usual, meetings and number of talented practitioners. programs of likely interest to most members of our Committee are highlighted in this issue of Those who know me expect me to use the Newsletter. Just the idea of New Orleans in improbable analogies to make my points, and I the Spring warms the heart of those of us in the will not disappoint. Civilization began with North. For those from warmer climates the somebody’s idea of selecting seeds for repeat prospect of seeing your favorite friends and planting and harvesting by settled communities, colleagues will have to do. Whatever it is, rather than hunting and gathering, as a way of please join us in New Orleans. life. That eventually allowed some to devote time and energy to work other than what was Future Committee Projects. This issue of needed to keep themselves alive ― things like the Newsletter marks the likely end of whatever social norms, art and ethics. Add the power of honeymoon period I have as incoming chair of specialization and collaboration and in due our Committee, so I am going to take the course you go from Hammurabi to Aristotle, opportunity to share my thoughts on what I see Galileo and Einstein, and now to Watson. What as our Committee’s agenda for my term. The does that have to do with legal opinions? I think world of legal opinions has been getting both of the 1989 gathering in Silverado as our simpler and more complex as we focus on issues equivalent of the decision to settle down and at broader and deeper levels. Let me illustrate farm. That decision allowed some lawyers to the point by listing some of the projects specialize in the area of closing opinions, and currently underway: (1) after publication of our decades later we have wonderful collaboration Committee’s report on cross-border opinions among groups of opinion specialists who (Cross-Border Closing Opinions of U.S. collectively produce a wealth of guidance on Counsel, 71 Bus. Law. 139 (Winter 2015-2016)), which many more practicing lawyers rely. we approved at the 2016 Fall Meeting a joint effort with interested opinion groups in other The Cross-Border Opinions Convergence countries to promote some measure of Project. Now what? Most human efforts convergence in cross-border opinion practice, struggle with the law of diminishing returns. with an initial focus on establishing a common Countering it requires reliance on specialization understanding of core opinion principles and and collaboration to push the peak of the curve usage; (2) we also have in the works a report on upward and to the right. Our Committee, opinions of local counsel; (3) our Committee WGLO, state bar opinion committees, TriBar and WGLO are working hard on completing the and the Securities Law Opinions Subcommittee Statement and the Core Principles to update our must work together to do so. I believe that the Committee’s Legal Opinion Principles (53 Bus. projects for which our Committee has taken the Law. 831 (1998)) in their entirety and selected lead ― cross-border opinion practice and, provisions of the Guidelines for the Preparation jointly with WGLO, updating the principles of of Closing Opinions (57 Bus. Law. 875 (2002)); customary opinion practice -- are the ones for (4) the TriBar Opinion Committee is nearing which our Committee is the logical leader. I am completion of a report on opinions on limited particularly excited about our Committee’s partnerships and is well into its work on a report efforts to promote convergence in cross- on opinions on the enforceability of contract jurisdictional opinion practice. With the ABA’s provisions allocating risk to the opinion giver’s imprimatur, we are the best-positioned bar group client; and (5) the Securities Law Opinions to reach outward to bar groups