Nonconsolidation Opinion

An opinion letter often furnished as a condition precedent ( to the closing of a securitization ( transaction. In the letter, counsel to the securities issuer (a special purpose vehicle ( (SPV)) states that in counsel's opinion there would be no reasonable likelihood of substantive consolidation ( of the assets of the SPV with those of the originators (the owners of the securitized assets before their sale to the SPV as part of the securitization) in the event the originator were to become a debtor in bankruptcy. Nonconsolidation opinions are often extensive and typically cover case law in the area of bankruptcy, piercing the corporate veil and substantive consolidation. For more on securitization legal opinions, see Practice Note, Securitization: US Transaction Parties and Documents ( For more on substantive consolidation in the context of a securitization, see In Dispute: General Growth Properties (

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