Non-Consolidation Opinion

This template is a Non-Consolidation Opinion. It is intended as a general drafting aid and will require modification according to the particular circumstances and the intentions of the parties. This template includes practical guidance, drafting notes, and alternate clauses. Non-consolidation opinions are commonly issued as part of a commercial real estate loan transaction, often when the applicable loan is going to be securitized through the commercial mortgage-backed securities (referred to as CMBS) market. The borrower in a structured credit facility may be established as a subsidiary of an operating company to hold certain assets – e.g., real estate - that will serve as collateral. The subsidiary will be established as a special purpose entity (SPE) also referred to as a bankruptcy-remote entity in an attempt to isolate the loan collateral from the risks and disruption of a bankruptcy proceeding. In real estate financing transactions, lenders with non-recourse mortgage loans on ...