sellers-counsel-opinion

# Opinion of Seller's Counsel (APA)

Drafts a closing opinion letter from seller's counsel in an asset purchase transaction, conforming to ABA Legal Opinion Accord standards and current market practice.

## Prerequisites

Gather before drafting:

- **Executed APA** with all exhibits, schedules, and disclosure letters
- **Ancillary agreements** — TSA, non-competes, escrow, IP assignments, bills of sale
- **Seller org docs** — articles/certificate of formation, bylaws/operating agreement, amendments
- **Authorization records** — board/manager resolutions, shareholder/member consents if required
- **Good standing certificate** — current, from seller's state of organization
- **Lien/litigation searches** — UCC, judgment, litigation results
- **Officer's certificate** — factual representations from seller's officers
- **Consents** — governmental, lender, and third-party consents obtained
- **APA opinion section** — scope, addressees, and reliance permissions

## Quick Start

1. Identify the APA opinion-delivery section to determine required scope and addressees
2. Extract party names, dates, jurisdictions, and consent requirements from matter documents
3. Draft the opinion letter following the structure below
4. Apply assumptions, qualifications, and reliance limitations per ABA Accord

## Letter Structure

### 1. Letterhead & Addressee

- Firm name/address, closing date, buyer entity + buyer's counsel (exact legal names from APA)

### 2. Introduction

- Reference APA by full title, execution date, all parties with legal names and jurisdictions
- State role as seller's counsel; confirm delivery as condition precedent under APA § [specify]
- Define scope boundaries

### 3. Documents Examined

Organize by category:

- **Transaction docs** — APA, ancillary agreements
- **Org docs** — articles/certificate, bylaws/operating agreement, amendments
- **Corporate records** — resolutions, consents, minutes, ledgers
- **Government/third-party** — good standing, tax clearances, regulatory approvals, lender consents
- **Searches** — UCC, litigation, judgment, IP registrations
- **Certificates** — officer and official certificates (describe with particularity)

### 4. Assumptions & Qualifications

**Standard assumptions:**
- Genuineness of signatures; authenticity of originals; conformity of copies
- Legal capacity of natural persons
- Power, authority, valid execution by all non-client parties
- Accuracy of officer and official certificates; no mutual mistake of fact

**Jurisdictional scope:** Limited to seller's state of organization + U.S. federal law. Expressly disclaim all other state and foreign law.

**Excluded matters** (unless specifically engaged): tax, environmental, ERISA/benefits, IP validity, antitrust, industry-specific regulatory.

**Standard qualifications:**
- Bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer
- General equitable principles (materiality, reasonableness, good faith, unconscionability)
- Equitable remedies subject to judicial discretion

### 5. Opinions

Draft each as a separately numbered paragraph:

| # | Opinion | Key Basis |
|---|---|---|
| 1 | **Organization & standing** — duly organized, validly existing, in good standing | Org docs + good standing cert |
| 2 | **Power & authority** — requisite power to own/operate assets and perform under APA | Org docs, APA |
| 3 | **Due authorization** — all necessary entity action taken; no further proceedings required | Resolutions, consents |
| 4 | **Due execution & delivery** — duly executed and delivered by seller | Execution copies |
| 5 | **Enforceability** — legal, valid, binding obligations enforceable per terms (subject to § 4 qualifications) | Legal analysis |
| 6 | **No conflicts** — does not violate: (a) org docs, (b) applicable law, (c) material agreements/orders | Org docs, searches, officer cert |
| 7 | **Consents & approvals** — all required consents obtained and in effect | Consent files |
| 8 | **Securities exemption** (if applicable) — no registration required under 1933 Act or state securities laws | Facts + representations |
| 9 | **HSR compliance** (if applicable) — required filings made; waiting periods expired/terminated | Filing records |
| 10 | **No litigation** — to knowledge after due inquiry, no pending/threatened actions challenging the transaction | Officer cert, litigation searches |

### 6. Closing & Reliance Limitations

- Opinions solely for named addressees in connection with this transaction
- No third-party reliance without prior written consent
- Opinions as of letter date only; no update obligation
- If APA requires lender reliance, add consent language with limitations
- Execute with firm name, partner signature, title, bar admissions

## Pitfalls & Checks

- **Extract specifics from matter docs** — never use placeholders where facts are available
- **ABA conformity** — follow the ABA Legal Opinion Accord for standard formulations
- **"Knowledge" qualifiers** — define explicitly (actual knowledge of participating lawyers, after inquiry of specified officers)
- **"Material" qualifiers** — use only where APA permits; over-qualification undermines opinion value
- **Negative assurance vs. opinions** — do not conflate; use negative assurance only where expressly requested
- **Officer certificate backstop** — no-conflict and no-litigation factual predicates must rest on identified officer certificates
- **Jurisdiction-specific rules** — check state requirements (e.g., Delaware entity formulations; California long-arm and franchise tax)
- **Scope discipline** — if excluded matters arise in APA requirements, flag for attorney review rather than expanding scope
- **Mark uncertain citations** — use `[VERIFY]` for any statutory/regulatory citation not confirmed from source materials