LEO: Corporation - Conflict of Interest  LE Op. 779

 

Corporation - Conflict of Interest.

 

April 14, 1986

 

A law firm is counsel to a corporation which is a political subdivision

of the Commonwealth of Virginia. Said corporation is a developer of an

industrial park and an "issuer" of Industrial Revenue Bonds. Counsel

advises corporation as to whether applicants for bonds are proper

applicants and drafts bonds and prepares security documents associated

with the applicant. Counsel also renders advice concerning the issuance of

tax free industrial issuance bonds during the formation of the project in

order to comply with federal and state regulations. Under these

circumstances, it is not improper for one law firm to serve as counsel to

the parties indicated above. The interests of the lender and the applicant

developer are not inconsistent, but mutually exclusive. Both parties to

the transaction are sophisticated users of money and legal services and

know and appreciate the distinctions among legal responsibilities

undertaken by the firm. [ DR:5-105(C)]

 

Committee Opinion April 14, 1986