ThomasMoreAI 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
- Identify the APA opinion-delivery section to determine required scope and addressees
- Extract party names, dates, jurisdictions, and consent requirements from matter documents
- Draft the opinion letter following the structure below
- 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