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In My Opinion ‘No-Litigation’ Assurance Redux 

07-31-2017 04:42 PM

Article by Lydia C. Stefanowicz originally published in the Business Law Section Newsletter Vol. 41, No. 1 – August 2017. In March 2017, Quarles & Brady, LLP, a prominent AmLaw 200 law firm, was sued for damages allegedly arising from a third-party closing opinion issued in connection with a loan closing.1 In 2007, the firm had represented the borrower, a corporate guarantor and two individual guarantors, in a $4.3 million mezzanine loan transaction relating to a condominium development project in Chicago. At some point after the closing, the borrower and guarantors defaulted on the loan and, as a result, the lender obtained a $10 million judgment. Subsequently, the borrower and certain guarantors declared bankruptcy, rendering the judgment uncollectible. The lender then targeted counsel for the borrower and guarantors—a classic deep pocket—on the basis of its legal opinion. Download to read more.

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An article by Lydia C. Stefanowicz originally published in the Business Law Section Newsletter Vol. 41, No. 1 – August 2017

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