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Bond Indentures – Injunction

By: Derek Hawkins//December 1, 2015//

Bond Indentures – Injunction

By: Derek Hawkins//December 1, 2015//

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7th Circuit Court of Appeals

Case No.: 14-2287; 14-2150

Case Name: Godfrey & Kahn v. Lac Du Flambeau Band of Lake Superior Chippewa Indians et al

Officials: FLAUM, RIPPLE, and WILLIAMS, Circuit Judges.

Pertinent Practice Areas: Bond Indentures – Injunction

Injunction preventing tribal court action from Tribal entities in long standing litigation granted, injunction preventing injunctive relief to law firm appellant reversed.

“Here, where it is clear that Godfrey was intimately involved in the negotiations leading to, and the documents embodying, the bond transaction, and where the Tribal Entities do not take exception to the conclusion that Godfrey would be bound by the forum selection clauses in the Bond Documents, we believe that the concepts of affiliation and mutuality are met. Moreover, we believe that this is a particularly appropriate case to allow a nonparty to invoke a forum selection clause. Godfrey was not simply counsel to the Tribal Entities, it was bond counsel to the transaction. As one commentator has observed, “[a]lthough bond counsel is usually retained by the issuer, bond opinions must be completely objective, since they will not serve the function of facilitating the sale of bonds unless they are accepted as reliable in the bond market.” 2 James A. Coniglio & M. David Gelfland, State & Federal Government Debt Financing § 16.16 (2d ed. 2015). Indeed, some courts have recognized that “an attorney who issues an opinion letter for the purpose of inducing a non-client to purchase municipal notes or bonds can be liable for negligent misrepresentation when the opinion letter contains material misstatements of fact.” Mohaffy, Rider, Windholz & Wilson v. Central Bank of Denver, 892 P.2d 230, 233 (Col. 1995);76 cf. Restatement (Third) of the Law Governing Lawyers § 51(2)(a) (2000) (stating that a lawyer owes a duty of care to a nonclient when the lawyer or his client “invites the nonclient to rely on the lawyer’s opinion…and the nonclient so relies”).

Affirmed in Part. Reversed in Part.

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Attorney Derek A. Hawkins is the managing partner at Hawkins Law Offices LLC, where he heads up the firm’s startup law practice. He specializes in business formation, corporate governance, intellectual property protection, private equity and venture capital funding and mergers & acquisitions. Check out the website at www.hawkins-lawoffices.com or contact them at 262-737-8825.

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