CALDERWOOD & HARKNESS LLP
CONFIDENTIAL — INTERNAL MEMORANDUM
Conflict Check Memorandum
June 27, 2022
TO: Douglas Carmichael, Responsible Partner Francesca Morano, Billing Partner
FROM: Yuki Nakamura, Associate, Calderwood & Harkness LLP
RE: Conflicts Clearance — Proposed Representation of Quorum Insurance Holdings Corp. and Subsidiaries in $500,000,000 Insurance Premium Finance ABS Issuance
MATTER NO.: 1025-00007 (Pending Opening)
OFFICE: 601 Lexington Avenue, New York, NY 10022
CONFIDENTIALITY NOTICE: This memorandum is prepared for internal use only and is subject to attorney-client privilege and work product protection. It contains confidential information regarding the firm's client relationships and internal conflict-checking procedures. Distribution is limited to the addressees, the firm's General Counsel's Office, and such other partners and personnel as may be necessary for the evaluation of the conflicts issues discussed herein. This memorandum should not be forwarded to any client, prospective client, or third party without prior approval of the firm's General Counsel.
1. Purpose and Summary of Clearance Request
Calderwood & Harkness LLP ("the Firm" or "C&H") has been asked by Quorum Insurance Holdings Corp. ("QIH"), a Delaware corporation headquartered at 400 Atlantic Street, Suite 2200, Stamford, Connecticut 06901 (NYSE: QIHC), to serve as issuer's counsel in a proposed $500,000,000 asset-backed securities issuance (the "Transaction" or the "Proposed Transaction"). The engagement inquiry was received on June 23, 2022, by Douglas Carmichael from Nolan Whitford, General Counsel of QIH, following preliminary discussions at the Structured Finance Industry Group annual conference.
The Transaction involves the securitization of insurance premium finance receivables originated by QIH's wholly owned subsidiary, Quorum Premium Finance LLC ("QPF"), through a bankruptcy-remote special purpose entity, Quorum Receivables Funding 2022-1 LLC ("QRF 2022-1"), with an intermediate depositor entity, Quorum Receivables Holding LLC ("QRH"). Specifically, QPF will sell and assign eligible insurance premium finance receivables to QRH, which will in turn transfer such receivables to QRF 2022-1. QRF 2022-1 will issue multiple classes of asset-backed notes secured by the receivables pool to fund the acquisition of such receivables. The notes are expected to be offered and sold pursuant to Rule 144A and Regulation S under the Securities Act of 1933, as amended.
The Firm has been asked to serve as issuer's counsel to QIH, QPF, QRH, and QRF 2022-1 (collectively, the "Proposed Clients") in connection with the Transaction. The scope of the proposed engagement would encompass structuring advice, preparation and negotiation of transaction documents (including the indenture, note purchase agreement, receivables sale agreement, receivables transfer agreement, servicing agreement, administration agreement, and related ancillary documents), rendering of legal opinions (including true sale opinions, non-consolidation opinions, security interest perfection opinions, and enforceability opinions), and coordination with underwriter's counsel, trustee's counsel, rating agencies, auditors, and verification agents through closing.
This memorandum documents the results of the Firm's conflict check conducted on June 27, 2022, prior to engagement opening, and confirms clearance for the proposed representation. The Firm's central conflicts database was searched against all Proposed Clients and all known counterparties, transaction participants, and their respective key personnel. The search methodology, results, and analysis are detailed in the sections that follow.
Based on the comprehensive search and analysis described herein, no conflicts of interest have been identified that would preclude the Firm from accepting the proposed engagement. The matter is recommended for clearance and opening, subject to execution of an engagement letter containing appropriate multi-entity representation disclosures.
2. Proposed Clients
The following entities have been identified as the Proposed Clients for purposes of this conflict check. Each entity is described with sufficient detail to permit accurate identification within the Firm's conflicts database and to facilitate new-client onboarding procedures.
2.1 Quorum Insurance Holdings Corp. (QIH)
• Full Legal Name: Quorum Insurance Holdings Corp.
• Entity Type: Corporation organized under the laws of the State of Delaware; publicly traded on the New York Stock Exchange (ticker symbol: QIHC)
• Employer Identification Number (EIN): 82-4391067
• Headquarters: 400 Atlantic Street, Suite 2200, Stamford, CT 06901
• Registered Agent: Ashgrove Services Inc., 28 Liberty Street, New York, NY 10005
• Role in Transaction: Sponsor of the securitization program; ultimate parent company of the originator, depositor, and issuer; performance guarantor under the administration agreement; administrator of the issuer and depositor pursuant to the administration agreement
• Key Contacts:
• Marcus Devereaux, Chief Executive Officer
• Priya Raghavan, Chief Financial Officer
• Nolan Whitford, General Counsel
• Sandra Ling-Hwang, Treasurer
• Business Description: QIH is a diversified insurance services holding company engaged in property and casualty insurance distribution, insurance premium finance lending, and insurtech software-as-a-service platform development and licensing. QIH operates through a network of approximately 450 independent agencies across 38 states and manages a premium finance loan portfolio originated through QPF. For fiscal year 2021, QIH reported consolidated revenue of approximately $3.8 billion and total assets of approximately $12.4 billion. QIH has been publicly traded since its initial public offering in 2017 and currently has a market capitalization of approximately $6.2 billion.
• Regulatory Status: QIH is an SEC reporting company subject to periodic filing requirements under the Securities Exchange Act of 1934. Certain of its insurance subsidiaries are regulated by state insurance departments in their respective domiciliary jurisdictions. QPF's lending activities are subject to state consumer lending and premium finance licensing requirements.
2.2 Quorum Premium Finance LLC (QPF)
• Full Legal Name: Quorum Premium Finance LLC
• Entity Type: Limited liability company organized under the laws of the State of Delaware; wholly owned subsidiary of QIH
• Employer Identification Number (EIN): 84-2653198
• Principal Office: 400 Atlantic Street, Suite 2200, Stamford, CT 06901
• Registered Agent: Ashgrove Services Inc., 28 Liberty Street, New York, NY 10005
• Role in Transaction: Originator of insurance premium finance receivables; seller of receivables to QRH pursuant to a receivables sale agreement; servicer of the receivables pool pursuant to a servicing agreement with QRF 2022-1
• Manager: Sandra Ling-Hwang, in her capacity as Treasurer of QIH, serves as the sole manager of QPF
• Business Description: QPF is a licensed premium finance company that originates short-term loans to commercial and personal-lines insurance policyholders to finance the payment of insurance premiums. QPF currently originates receivables in 42 states and maintains premium finance licenses in each such state. As of March 31, 2022, QPF's total receivables portfolio was approximately $2.1 billion, with a weighted average remaining term of approximately 7.2 months and a weighted average annual percentage rate of approximately 9.4%.
2.3 Quorum Receivables Funding 2022-1 LLC (QRF 2022-1)
• Full Legal Name: Quorum Receivables Funding 2022-1 LLC
• Entity Type: Limited liability company to be organized under the laws of the State of Delaware; bankruptcy-remote special purpose vehicle; Issuer of the asset-backed notes
• Anticipated Employer Identification Number (EIN): 88-1247653
• Anticipated Registered Agent: Ashgrove Services Inc., 28 Liberty Street, New York, NY 10005
• Sole Member: Quorum Receivables Holding LLC (QRH)
• Independent Manager: Timothy R. Callan, to be appointed through Fortbridge Corporate Services LLC, Wilmington, Delaware
• Role in Transaction: Issuer of the Class A Notes, Class B Notes, and Class C Notes; owner of the receivables pool; grantor of a security interest in the receivables and related assets to Calvoneth Trust Company, N.A., as indenture trustee, for the benefit of the noteholders
• Note Regarding Formation: QRF 2022-1 has not yet been formed as of the date of this memorandum. Formation is anticipated for early August 2022, following engagement opening and initial structuring work. The conflicts check has been run against the anticipated entity name, the anticipated independent manager, and all known affiliates. A supplemental conflicts check will be performed upon formation if any changes to the entity name, structure, or personnel are made.
2.4 Quorum Receivables Holding LLC (QRH)
• Full Legal Name: Quorum Receivables Holding LLC
• Entity Type: Limited liability company to be organized under the laws of the State of Delaware; intermediate bankruptcy-remote special purpose vehicle; Depositor
• Anticipated Employer Identification Number (EIN): 88-1247619
• Anticipated Registered Agent: Ashgrove Services Inc., 28 Liberty Street, New York, NY 10005
• Sole Member: Quorum Premium Finance LLC (QPF)
• Independent Manager: Eleanor M. Vasquez, to be appointed through Fortbridge Corporate Services LLC, Wilmington, Delaware
• Role in Transaction: Depositor; acquires receivables from QPF pursuant to the receivables sale agreement and transfers such receivables to QRF 2022-1 pursuant to a receivables transfer agreement; serves as the intermediate entity in the two-step true sale structure designed to achieve bankruptcy remoteness for the issuer
• Note Regarding Formation: QRH has not yet been formed as of the date of this memorandum. Formation is anticipated for early August 2022. The same supplemental conflicts check protocol described above in Section 2.3 will apply.
3. Identified Counterparties and Adverse/Interested Parties
The following entities and individuals have been identified as counterparties, transaction participants, or otherwise interested parties in the Proposed Transaction. Each has been checked against the Firm's conflicts database. Their roles, identifying information, and key contacts are set forth below.
3.1 Ridgeline Capital Markets LLC
• Full Legal Name: Ridgeline Capital Markets LLC
• Entity Type: Limited liability company organized under the laws of the State of Delaware; registered as a broker-dealer with the U.S. Securities and Exchange Commission and a member of the Financial Industry Regulatory Authority (FINRA)
• Principal Office: 383 Madison Avenue, 14th Floor, New York, NY 10179
• Role in Transaction: Structuring agent, lead bookrunner, and sole placement agent for the offering and sale of the Class A Notes, Class B Notes, and Class C Notes pursuant to a note purchase agreement; Ridgeline is expected to purchase the notes from QRF 2022-1 for resale to eligible institutional investors under Rule 144A and Regulation S
• Key Contacts:
• Julian Weatherstone, Head of ABS Origination
• Rebecca Tran, Managing Director, Insurance Finance ABS
• Deal Identification: RCM-IPF-2022-0041
• Outside Counsel: Calloway & Brandt LLP (see Section 3.4 below)
3.2 Calvoneth Trust Company, N.A.
• Full Legal Name: Calvoneth Trust Company, National Association
• Entity Type: National banking association chartered under the laws of the United States; regulated by the Office of the Comptroller of the Currency
• Corporate Trust Office: 600 Travis Street, Suite 5800, Houston, TX 77002
• Role in Transaction: Indenture trustee under the indenture governing the notes; paying agent for distributions on the notes; calculation agent; securities intermediary with respect to the collection account and other transaction accounts; custodian of the receivables files
• Key Contact: Gerald K. Fontaine, Senior Trust Officer, Structured Finance Division
• Outside Counsel: Ashfield & Greer LLP (see Section 3.5 below)
3.3 Northvane Bank, N.A.
• Full Legal Name: Northvane Bank, National Association
• Entity Type: National banking association chartered under the laws of the United States; regulated by the Office of the Comptroller of the Currency
• Principal Office: 200 Vesey Street, New York, NY 10281
• Role in Transaction: Back-up servicer for the receivables pool pursuant to a back-up servicing agreement with QRF 2022-1; provider of a $25,000,000 revolving liquidity facility to QRF 2022-1 pursuant to a liquidity facility agreement, to fund short-term cash flow mismatches between receivables collections and note payment dates
• Key Contact: Diane Coletti, Managing Director, Structured Products Group
3.4 Calloway & Brandt LLP
• Full Legal Name: Calloway & Brandt LLP
• Entity Type: Limited liability partnership organized under the laws of the State of New York; law firm
• Office: One Liberty Plaza, 165 Broadway, New York, NY 10006
• Role in Transaction: Outside counsel to Ridgeline Capital Markets LLC in its capacity as structuring agent, lead bookrunner, and sole placement agent (underwriter's counsel); responsible for due diligence review, negotiation of the note purchase agreement and related disclosure documents from the underwriter's perspective, and delivery of underwriter's counsel legal opinions
• Key Contacts:
• Harrison Collier, Partner
• Megan O'Shaughnessy, Senior Associate
3.5 Ashfield & Greer LLP
• Full Legal Name: Ashfield & Greer LLP
• Entity Type: Limited liability partnership organized under the laws of the State of New York; law firm
• Office: One Chase Manhattan Plaza, New York, NY 10005
• Role in Transaction: Outside counsel to Calvoneth Trust Company, N.A. in its capacity as indenture trustee; responsible for review and negotiation of the indenture, custodial agreement, and related documents from the trustee's perspective, and delivery of trustee's counsel legal opinions
• Key Contact: Vivian Sato, Partner
3.6 Fortbridge Corporate Services LLC
• Full Legal Name: Fortbridge Corporate Services LLC
• Entity Type: Limited liability company organized under the laws of the State of Delaware; independent director and manager services provider
• Principal Office: 1209 Orange Street, Wilmington, DE 19801
• Role in Transaction: Provider of independent managers for QRF 2022-1 (the Issuer) and QRH (the Depositor) to maintain the bankruptcy-remote status of such entities, consistent with structured finance market practice and rating agency requirements
• Named Independent Managers:
• Timothy R. Callan — to serve as independent manager of QRF 2022-1
• Eleanor M. Vasquez — to serve as independent manager of QRH
3.7 Brindoval Ratings Inc.
• Full Legal Name: Brindoval Ratings Inc.
• Entity Type: Corporation organized under the laws of the State of Delaware; registered with the U.S. Securities and Exchange Commission as a Nationally Recognized Statistical Rating Organization (NRSRO)
• Principal Office: 55 Water Street, New York, NY 10041
• Role in Transaction: Rating agency; has assigned the following preliminary ratings to the notes:
• Class A Notes: AAA(cr) (preliminary)
• Class B Notes: A(cr) (preliminary)
• Class C Notes: BBB(cr) (preliminary)
• Key Contact: Andrew Petrosian, Lead Analyst, Insurance Finance ABS Group
• Engagement Number: CR-SF-2022-08812
3.8 Pinnacle Rating Services LLC
• Full Legal Name: Pinnacle Rating Services LLC
• Entity Type: Limited liability company organized under the laws of the State of Delaware; registered with the U.S. Securities and Exchange Commission as a Nationally Recognized Statistical Rating Organization (NRSRO)
• Principal Office: 7 World Trade Center, New York, NY 10007
• Role in Transaction: Rating agency; has assigned the following preliminary ratings to the notes:
• Class A Notes: Aaa(p) (preliminary)
• Class B Notes: A1(p) (preliminary)
• Class C Notes: Baa2(p) (preliminary)
• Key Contact: Monica Sung, Lead Analyst, Structured Finance Group
• Engagement Number: PRS-2022-ABS-3347
3.9 Additional Parties Checked
In addition to the principal counterparties identified above, the following entities and individuals were identified as participants in the Transaction and were included in the conflicts check:
Meridian Ledger LLP — Full legal name: Meridian Ledger LLP. Entity type: Limited liability partnership organized under the laws of the State of Delaware; PCAOB-registered public accounting firm. Office: 1301 Avenue of the Americas, New York, NY 10019. Role: Independent auditor to QIH; engaged to provide an agreed-upon procedures letter with respect to the receivables pool data and statistical information included in the offering memorandum, and a comfort letter to Ridgeline Capital Markets LLC and Calderwood & Harkness LLP covering specified financial information. Engagement partner: Robert Falcone.
Veristead Analytics LLC — Full legal name: Veristead Analytics LLC. Entity type: Limited liability company organized under the laws of the State of Delaware. Office: 100 Summer Street, Suite 1500, Boston, MA 02110. Role: Third-party verification agent retained to perform independent verification of the receivables pool, including tape reconciliation, pool stratification analysis, re-underwriting of a statistical sample of receivables, and confirmation of eligibility criteria compliance. Managing director: Katharine Drummond.
Ashgrove Services Inc. — Full legal name: Ashgrove Services Inc. (a Vireo Enterprises business). Office: 28 Liberty Street, New York, NY 10005. Role: Registered agent for service of process for QIH (currently) and for QRF 2022-1 and QRH (upon formation). Hollowell Technologies's role is ministerial in nature and does not give rise to any substantive conflict of interest concerns. Nevertheless, it has been included in the search for completeness.
4. Conflicts Database Search Methodology
The conflicts check documented in this memorandum was conducted on June 27, 2022, using the Firm's central conflicts management system, IntegriCheck (version 8.4), which is maintained by the Firm's General Counsel's Office in coordination with the New Business Intake Department. The following search methodology was employed:
Search Parameters. Separate searches were conducted for each entity and individual listed in Sections 2 and 3 above. For each entity, the search was run using the following identifiers: (a) full legal name; (b) all known short names, trade names, d/b/a names, and abbreviations; (c) ticker symbols (where applicable); and (d) employer identification numbers (where known). For each individual, the search was run using full name, known variations, and, where available, employer affiliation.
Scope of Search. The searches covered all active and recently closed matters (defined as matters closed within the preceding five years, consistent with the Firm's document retention and conflicts tracking policies) across all offices and practice groups of Calderwood & Harkness LLP, including the Firm's offices in New York, Washington, D.C., Los Angeles, Chicago, London, Hong Kong, and Tokyo. The search encompassed all matter types, including transactional, litigation, advisory, and pro bono representations. Both client and adverse-party fields within the database were queried for each search term.
Individual Searches. In addition to entity-level searches, separate searches were conducted for the following named individuals, each of whom has been identified as a key contact or officer of a Transaction participant: Marcus Devereaux, Priya Raghavan, Nolan Whitford, Sandra Ling-Hwang, Julian Weatherstone, Rebecca Tran, Harrison Collier, Megan O'Shaughnessy, Gerald K. Fontaine, Vivian Sato, Diane Coletti, Timothy R. Callan, Eleanor M. Vasquez, Andrew Petrosian, Monica Sung, Robert Falcone, and Katharine Drummond.
Affiliate and Parent Entity Searches. Additional searches were conducted for known parent entities, subsidiaries, and commonly affiliated entities of each Transaction participant, to the extent such affiliates could be reasonably identified through publicly available information, including SEC filings, corporate websites, and commercial databases.
Engagement Team Verification. Each member of the proposed engagement team was separately queried regarding any personal financial interest, family relationship, or prior professional relationship with any of the identified parties or their key personnel that could give rise to a conflict or the appearance of a conflict.
Limitations. The Firm's conflicts database reflects information entered in connection with the opening and management of client matters. The accuracy and completeness of the database depend on the timely and accurate submission of new business intake forms by Firm lawyers. While the Firm endeavors to maintain a comprehensive and current database, the database may not capture every potential relationship, particularly with respect to entities that were not directly named as clients or adverse parties in prior matters. This memorandum is based on the information available in the database as of the search date and on the representations of the proposed engagement team members.
5. Search Results and Analysis
This section sets forth the results of the conflicts database search for each entity and individual identified in Sections 2 through 4, together with the Firm's analysis of any potential conflicts or other issues identified.
5.1 Quorum Insurance Holdings Corp. and Subsidiaries (QPF, QRF 2022-1, QRH)
Search Results: The Firm's conflicts database was searched for "Quorum Insurance Holdings Corp.," "Quorum Insurance Holdings," "Quorum Insurance," "Quorum Holdings," "QIHC," "QIH," "Quorum Premium Finance LLC," "Quorum Premium Finance," "QPF," "Quorum Receivables Funding 2022-1 LLC," "Quorum Receivables Funding," "QRF 2022-1," "Quorum Receivables Holding LLC," "Quorum Receivables Holding," and "QRH." Additional searches were run for EINs 82-4391067 and 84-2653198, and for the anticipated EINs 88-1247653 and 88-1247619.
No prior representations of QIH or any identified subsidiary were located in the Firm's database. No matters in which QIH or any identified subsidiary appeared as an adverse party, co-party, or interested party were identified. Searches for the term "Quorum" returned results relating to an unrelated entity, Quorum Health Corporation (a Tennessee-based hospital operator), which was identified in three closed matters from the Firm's healthcare practice group. Upon review, these matters involve an entirely distinct entity with no corporate, ownership, or business relationship to Quorum Insurance Holdings Corp. or any of its subsidiaries. These results have been marked as non-responsive.
Analysis: QIH, QPF, QRF 2022-1, and QRH are new clients to the Firm. The Firm has no prior attorney-client relationship with any of these entities. No matters adverse to QIH or its subsidiaries have been identified. Standard new-client onboarding and Know Your Client ("KYC") procedures, including verification of corporate formation documents, beneficial ownership information (consistent with FinCEN requirements and the Firm's internal anti-money laundering policies), and OFAC screening, will be completed in connection with engagement opening.
Conclusion: No conflict identified. Cleared.
5.2 Ridgeline Capital Markets LLC
Search Results: The Firm's conflicts database was searched for "Ridgeline Capital Markets LLC," "Ridgeline Capital Markets," "Ridgeline Capital," "Ridgeline," and "RCM." The search returned results relating to Ridgeline Capital Markets LLC in connection with three matters:
(a) Matter No. 1025-00007 (closed March 2020): Calderwood & Harkness represented Cascade Reinsurance Ltd. as issuer's counsel in a $350,000,000 catastrophe bond transaction in which Ridgeline Capital Markets served as sole structuring agent and placement agent. Ridgeline was not a client of the Firm in that matter; it appeared as a counterparty. The matter was closed upon successful completion of the transaction, and no disputes arose between the parties.
(b) Matter No. 1025-00007 (closed September 2020): Calderwood & Harkness represented Triton Auto Finance Corp. as issuer's counsel in a $600,000,000 auto loan ABS issuance in which Ridgeline Capital Markets served as co-lead bookrunner (alongside Pinnacle Savings Bank). Ridgeline was not a client of the Firm; it appeared as a counterparty. The matter was closed upon successful completion of the transaction with no outstanding issues.
(c) Matter No. 1025-00007 (closed January 2022): Calderwood & Harkness represented Ridgeline Capital Markets LLC as borrower's counsel in connection with a $75,000,000 revolving credit facility provided by a syndicate of lenders led by Adriatic Savings Bank This matter was a direct client engagement with Ridgeline. The matter was closed upon closing of the credit facility, and there are no ongoing obligations or active advisory relationships.
Analysis: The search results indicate that the Firm has had a direct client relationship with Ridgeline Capital Markets LLC in connection with Matter No. 1025-00007 (the revolving credit facility), which was closed in January 2022. The Firm has also appeared across the table from Ridgeline in two prior ABS transactions (Matter Nos. 1025-00007 and 1025-00007), in which Ridgeline served as structuring agent or bookrunner and the Firm served as issuer's counsel — the same posture as the Proposed Transaction.
In the Proposed Transaction, Ridgeline serves as structuring agent, lead bookrunner, and sole placement agent. Calderwood & Harkness is being asked to represent the issuer/sponsor side (QIH and its subsidiaries), not the underwriter. Ridgeline has engaged its own independent outside counsel, Calloway & Brandt LLP, to represent its interests in the Transaction. Although the interests of the issuer and the placement agent are generally aligned in an ABS offering — both parties share the objective of a successful transaction execution — their interests may diverge with respect to certain matters, including the scope and content of the issuer's representations and warranties in the note purchase agreement, indemnification obligations, pricing terms, and the allocation of liability in connection with the offering memorandum.
The Firm's prior representation of Ridgeline in an unrelated credit facility matter (Matter No. 1025-00007) does not create a concurrent conflict of interest, as that matter has been closed and there is no ongoing attorney-client relationship with Ridgeline. The Firm does not possess any confidential information obtained from Ridgeline in connection with the credit facility matter that would be material to, or usable against Ridgeline in, the Proposed Transaction. The subject matter of the prior representation (a corporate revolving credit facility) is wholly unrelated to the subject matter of the Proposed Transaction (an ABS issuance in which Ridgeline acts as placement agent).
Under the New York Rules of Professional Conduct, Rule 1.9(a), a lawyer who has formerly represented a client in a matter shall not thereafter represent another person in the same or a substantially related matter in which that person's interests are materially adverse to the interests of the former client, unless the former client gives informed consent, confirmed in writing. Here, the Proposed Transaction is not the same or substantially related to the prior credit facility matter, and the Firm's role as issuer's counsel opposite Ridgeline as placement agent does not constitute material adversity — this is a standard commercial counterparty relationship in a structured finance transaction, not adversarial litigation or a matter in which the Firm would be seeking to undermine Ridgeline's interests.
Conclusion: No disqualifying conflict. The prior client relationship with Ridgeline in an unrelated matter does not give rise to a conflict under Rule 1.9, as the matters are not substantially related and the posture is not materially adverse. The counterparty relationship in the Proposed Transaction is a standard, arms-length arrangement in ABS transactions. No waiver or consent from Ridgeline is required. Cleared.
5.3 Calvoneth Trust Company, N.A.
Search Results: The Firm's conflicts database was searched for "Calvoneth Trust Company," "Calvoneth Trust," "Haverford," and "Calvoneth Trust Company, N.A." The search returned results relating to Calvoneth Trust Company, N.A. in connection with seven matters, all of which involved ABS or structured finance transactions in which the Firm served as issuer's counsel or sponsor's counsel and Calvoneth Trust served as indenture trustee, paying agent, or custodian. Specifically:
(a) Matter Nos. 2018-SCR-01906, 2019-SCR-02457, 1025-00007, 1025-00007, 2020-SCR-03298, 2021-SCR-03612, and 1025-00007 — all closed matters in which Calvoneth Trust appeared as a counterparty in its fiduciary capacity as indenture trustee and/or custodian. In none of these matters was Calvoneth Trust a client of the Firm.
No matters in which the Firm represented Calvoneth Trust as a client were identified. No matters adverse to Calvoneth Trust (i.e., litigation, disputes, or other adversarial proceedings) were identified.
Analysis: Calvoneth Trust Company, N.A. is a frequent participant in structured finance transactions in which the Firm serves as issuer's counsel. The Firm has never represented Calvoneth Trust as a client and does not possess any confidential information of Calvoneth Trust. In the Proposed Transaction, Calvoneth Trust serves as indenture trustee, paying agent, calculation agent, securities intermediary, and custodian — a fiduciary role for the benefit of the noteholders. Calvoneth Trust has engaged its own independent outside counsel, Ashfield & Greer LLP, to represent its interests in the Transaction. The trustee's interests are generally aligned with those of the issuer and the sponsor during the structuring and closing phases of an ABS transaction. Potential divergence of interest between the issuer and the trustee may arise in the context of an event of default or enforcement scenario under the indenture, but such scenarios are post-closing contingencies that do not present a current conflict at the engagement stage. The Firm does not currently represent any party in any matter adverse to Calvoneth Trust.
Conclusion: No conflict identified. Cleared.
5.4 Northvane Bank, N.A.
Search Results: The Firm's conflicts database was searched for "Northvane Bank," "Northvane Bank, N.A.," "Northvane Bank, National Association," and "Northvane." The search returned results relating to Northvane Bank, N.A. in connection with two matters:
(a) Matter No. 1025-00007 (closed June 2021): Calderwood & Harkness represented Atwater Consumer Lending Inc. as borrower's counsel in a $200,000,000 warehouse lending facility in which Northvane Bank served as administrative agent and a lender. Northvane Bank was not a client; it appeared as a counterparty.
(b) Matter No. 1025-00007 (active): Calderwood & Harkness represents Keystone Capital Corp. as issuer's counsel in an ongoing commercial mortgage-backed securities program in which Northvane Bank serves as back-up servicer. Northvane Bank is not a client in this matter; it appears as a counterparty.
No matters in which the Firm represented Northvane Bank as a client were identified. No matters in which the Firm's representation was adverse to Northvane Bank (in the sense of litigation or disputed proceedings) were identified.
Analysis: Northvane Bank, N.A. serves dual roles in the Proposed Transaction: (a) as back-up servicer under a back-up servicing agreement with QRF 2022-1, pursuant to which Northvane would assume servicing obligations in the event of a servicer default by QPF; and (b) as provider of a $25,000,000 revolving liquidity facility to QRF 2022-1 to fund short-term cash flow mismatches. Calderwood & Harkness does not represent Northvane Bank in any capacity in the Proposed Transaction or in any other active matter. Northvane Bank's interests in the Transaction are contractual in nature and are generally aligned with the issuer's interests — both parties have a shared objective in the successful performance of the receivables pool and the orderly servicing of the receivables. The Firm's concurrent representation of Keystone Capital Corp. in the CMBS program (Matter No. 1025-00007) where Northvane also serves as back-up servicer does not present a conflict, as the matters are unrelated and the Firm does not represent Northvane in either transaction. No current adverse representation exists.
Conclusion: No conflict identified. Cleared.
5.5 Calloway & Brandt LLP
Search Results: The Firm's conflicts database was searched for "Calloway & Brandt LLP," "Calloway & Brandt," "Calloway and Brandt," and "C&B LLP." The search returned results identifying Calloway & Brandt LLP as opposing counsel or co-counsel in approximately fourteen matters across the Firm's structured finance, capital markets, and M&A practice groups over the preceding five years. These included various ABS transactions, leveraged finance transactions, and acquisition financings in which Calloway & Brandt appeared on the opposite side of a negotiation from the Firm (representing underwriters, lenders, or purchasers) or as co-counsel to a co-party (representing a separate entity involved in the same transaction). In no instance was Calloway & Brandt itself a client of the Firm.
Analysis: Calloway & Brandt LLP is a law firm, not a client or a typical adverse party for conflict-checking purposes. The Firm routinely encounters Calloway & Brandt as opposing counsel or co-counsel in transactional matters. In the Proposed Transaction, Calloway & Brandt serves as underwriter's counsel to Ridgeline Capital Markets LLC. This is a standard, arms-length role in ABS transactions. The Firm and Calloway & Brandt will negotiate the transaction documents from their respective clients' perspectives, which is the ordinary course of transactional legal practice. No adversity concerns arise from this relationship. Law firms are not generally treated as "parties" for conflict-of-interest purposes under the Rules of Professional Conduct.
Conclusion: No conflict identified. Cleared.
5.6 Ashfield & Greer LLP
Search Results: The Firm's conflicts database was searched for "Ashfield & Greer LLP," "Ashfield & Greer," "Ashfield and Greer," and "A&G LLP." The search returned results identifying Ashfield & Greer LLP as opposing counsel or co-counsel in approximately nine matters, primarily in the Firm's structured finance and banking practice groups. In each instance, Ashfield & Greer appeared as trustee's counsel or lender's counsel in ABS, CMBS, or CLO transactions. In no instance was Ashfield & Greer itself a client of the Firm.
Analysis: Ashfield & Greer LLP is a law firm serving as trustee's counsel to Calvoneth Trust Company, N.A. The same analysis applicable to Calloway & Brandt applies here. The relationship is a standard co-participant role in a structured finance transaction, and no adversity concerns arise. The Firm and Ashfield & Greer will coordinate on the drafting and negotiation of the indenture and related trustee documents, consistent with standard market practice in sponsor-side ABS transactions.
Conclusion: No conflict identified. Cleared.
5.7 Fortbridge Corporate Services LLC
Search Results: The Firm's conflicts database was searched for "Fortbridge Corporate Services LLC," "Fortbridge Corporate Services," "Fortbridge," "Timothy R. Callan," "Timothy Callan," "Eleanor M. Vasquez," and "Eleanor Vasquez." The search returned results identifying Fortbridge Corporate Services LLC as a transaction participant in approximately twenty-three prior matters in the Firm's structured finance practice group, in each case serving as the provider of independent directors or independent managers for SPVs involved in securitization transactions. No matters were identified in which Fortbridge was a client of the Firm. No matters were identified in which the Firm's representation was adverse to Fortbridge or to any named independent manager. Separate individual searches for Timothy R. Callan and Eleanor M. Vasquez returned results consistent with their roles as independent managers appointed by Fortbridge in prior securitization transactions, but no results indicating a direct client relationship, adverse representation, or any other conflict.
Analysis: Fortbridge Corporate Services LLC is a commonly used provider of independent managers in structured finance transactions, and the Firm has frequently encountered Fortbridge in this capacity. Fortbridge's role is ministerial — it provides qualified individuals to serve as independent managers of SPVs to satisfy rating agency requirements and maintain bankruptcy remoteness. Fortbridge does not have independent economic interests in the Transaction that would be adverse to those of the Proposed Clients. No prior client relationship has been identified that would create a conflict. The individual independent managers, Timothy R. Callan and Eleanor M. Vasquez, serve in a limited fiduciary capacity and do not represent independent economic interests at the structuring stage.
Conclusion: No conflict identified. Cleared.
5.8 Brindoval Ratings Inc.
Search Results: The Firm's conflicts database was searched for "Brindoval Ratings Inc.," "Brindoval Ratings," "Brindoval," and "CRI." The search returned results identifying Brindoval Ratings Inc. as a transaction participant (rating agency) in approximately thirty-one prior matters in the Firm's structured finance and capital markets practice groups. No matters were identified in which Brindoval Ratings was a client of the Firm. One matter was identified in which Brindoval Ratings appeared as an adverse party:
(a) Matter No. 1025-00007 (closed December 2018): Calderwood & Harkness represented an institutional investor client (name redacted for confidentiality) in connection with a potential claim against Brindoval Ratings relating to the rating of certain residential mortgage-backed securities. The matter was resolved without litigation and was closed in December 2018. No ongoing obligations exist.
Analysis: Rating agencies occupy an independent analytical role in securitization transactions and are not parties to the transaction documents (other than rating agency confirmation provisions). The Firm does not represent Brindoval Ratings in any capacity. The one prior matter in which Brindoval appeared as an adverse party (Matter No. 1025-00007) involved a potential claim by an investor client relating to RMBS ratings — a subject matter wholly unrelated to the Proposed Transaction. That matter was closed nearly four years ago and did not result in litigation. In the Proposed Transaction, Brindoval is performing its ordinary business function of rating the notes and has no adversarial relationship with the Proposed Clients. The Proposed Clients are not adverse to Brindoval in any respect.
Conclusion: No conflict identified. The prior adverse matter involving Brindoval is factually and substantively unrelated to the Proposed Transaction and does not present a conflict under Rule 1.9 or Rule 1.7 of the New York Rules of Professional Conduct. Cleared.
5.9 Pinnacle Rating Services LLC
Search Results: The Firm's conflicts database was searched for "Pinnacle Rating Services LLC," "Pinnacle Rating Services," "Pinnacle Ratings," "Pinnacle," and "PRS." The search returned results identifying Pinnacle Rating Services LLC as a transaction participant (rating agency) in approximately twenty-seven prior matters in the Firm's structured finance and capital markets practice groups. No matters were identified in which Pinnacle Rating Services was a client of the Firm. No matters were identified in which the Firm's representation was adverse to Pinnacle Rating Services.
Analysis: The same analysis applicable to Brindoval Ratings applies to Pinnacle Rating Services. Pinnacle occupies an independent analytical role, is not a party to the transaction documents, and has no adversarial relationship with the Proposed Clients. The Firm does not represent Pinnacle and does not possess any confidential information of Pinnacle.
Conclusion: No conflict identified. Cleared.
5.10 Meridian Ledger LLP
Search Results: The Firm's conflicts database was searched for "Meridian Ledger LLP," "Meridian Ledger," and "Meridian LLP." Individual searches were also conducted for "Robert Falcone" and "Falcone." The search returned results identifying Meridian Ledger LLP as a transaction participant (auditor or provider of comfort letters and agreed-upon procedures reports) in approximately nineteen prior matters in the Firm's structured finance and capital markets practice groups. No matters were identified in which Meridian Ledger was a client of the Firm. No matters were identified in which the Firm's representation was adverse to Meridian Ledger. The individual search for Robert Falcone did not return any results indicating a prior relationship, conflict, or other issue.
Analysis: Meridian Ledger LLP serves as the independent auditor to QIH and will provide an agreed-upon procedures letter with respect to the receivables pool data and a comfort letter addressed to Ridgeline Capital Markets LLC and Calderwood & Harkness LLP. Meridian Ledger is a PCAOB-registered accounting firm occupying an independent professional role. It is not a party to the transaction documents and does not have adversarial interests vis-à-vis the Proposed Clients. The Firm does not represent Meridian Ledger in any capacity and does not possess any confidential information of Meridian Ledger.
Conclusion: No conflict identified. Cleared.
5.11 Veristead Analytics LLC
Search Results: The Firm's conflicts database was searched for "Veristead Analytics LLC," "Veristead Analytics," "Veristead," and "Katharine Drummond." The search returned one result:
(a) Matter No. 1025-00007 (closed February 2022): Veristead Analytics LLC appeared as a third-party verification agent in a $400,000,000 equipment lease ABS transaction in which Calderwood & Harkness served as issuer's counsel. Veristead was not a client; it appeared as a transaction participant. The matter was closed without incident.
The individual search for Katharine Drummond did not return any additional results.
Analysis: Veristead Analytics LLC serves as a third-party verification agent retained to perform independent verification of the receivables pool, including tape reconciliation, pool stratification analysis, re-underwriting of a statistical sample of receivables, and confirmation of eligibility criteria compliance. This is a consultancy and vendor role. Veristead has no adversarial interests vis-à-vis the Proposed Clients. The Firm has not represented Veristead and does not possess any confidential information of Veristead.
Conclusion: No conflict identified. Cleared.