Opinion: Managing lender expectations in cross-border transactions

Posted Sep 28, 2017

The scope of legal opinions requested by foreign lenders in our cross-border practice has expanded
in recent years, particularly in deals with Canadian lenders. Contrary to U.S. norms, foreign lenders
are requiring that their own counsel provide opinions typically rendered by debtor’s counsel and, with
growing frequency, requesting additional opinions that might seem uncommon to U.S. practitioners.

Pushing boundaries

In lending transactions involving U.S. parties, opinions are almost exclusively provided by the debtor’s
counsel. Increasingly, foreign lenders require a perfection opinion from their own U.S. counsel. A
perfection opinion that is strictly limited to the effects of filing a Uniform Commercial Code (UCC)
financing statement should not be problematic for a practitioner familiar with secured transactions. It
is imperative to convey to the client that an engagement solely for a perfection opinion does not
imply that you will also render an opinion as to organization of the debtor or the authorization and
enforceability of documents against the debtor (which may differ from custom in the foreign lender’s

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