A cold-comfort letter is a letter commonly used in the finance and business world. There are two types of comfort letters. The first type is utilised in securities offerings and is issued by a certified public accountant to certify the accuracy of the financial statement accompanying the offering. However, this letter has limited effect as the CPA only attests to certain authorized representations and warranties. The second type of comfort letter is used in corporations and is a letter of support (but not a guarantee) from a parent corporation on behalf of a subsidiary.
A cold-comfort letter is a type of comfort letter that is commonly used in the securities industry. It is a letter provided by a certified public accountant (CPA) to certify the accuracy of the financial statement included in a securities offering. However, the letter’s impact is limited as the CPA can only attest to certain representations and warranties authorized by the issuer.
For instance, when a company issues stocks to the public and includes a financial statement in the offering documents, they may request a cold-comfort letter from a CPA to assure potential investors of the statement’s accuracy.
In the corporate context, a cold-comfort letter is a letter of support, although not a guarantee, from a parent corporation on behalf of its subsidiary. The letter expresses the parent corporation’s support for the subsidiary’s activities and commitments.
For example, if a subsidiary of a corporation is embarking on a new business venture, the parent corporation may issue a cold-comfort letter to reassure potential partners or investors of their support for the subsidiary’s endeavors.
A cold-comfort letter is a written communication from a lawyer to a client that provides limited reassurance or comfort regarding a legal matter. It typically acknowledges the client’s concerns but does not offer any specific legal advice or guarantees.
Cold-comfort letters are often used in situations where a lawyer cannot provide a definitive answer or solution to a client’s legal problem. They are commonly employed in cases where the outcome is uncertain or where the lawyer’s ability to assist is limited.
No, a cold-comfort letter is not a legally binding document. It is merely a communication tool to acknowledge a client’s concerns and provide limited reassurance. It does not establish any legal rights or obligations.
Yes, cold-comfort letters are typically considered confidential communications between a lawyer and a client. However, it is important to consult with your lawyer to understand the specific confidentiality provisions that apply to your situation.
In most cases, a cold-comfort letter is not admissible as evidence in court. Since it does not contain any legal advice or guarantees, it is unlikely to have any significant impact on the outcome of a legal proceeding.
No, a cold-comfort letter cannot be used to waive or limit a lawyer’s liability. It is not a legal document and does not establish any legal rights or obligations.
While a cold-comfort letter can express a lawyer’s inability to provide further assistance, it does not automatically terminate the attorney-client relationship. If you wish to terminate the relationship, it is advisable to communicate your decision explicitly to your lawyer.
A cold-comfort letter is not typically used to request a refund of legal fees. If you have concerns about the fees charged by your lawyer, it is best to discuss the matter directly with them or consult with a legal professional.
Yes, if you are dissatisfied with the limited reassurance provided in a cold-comfort letter, you have the right to seek a second opinion from another lawyer. It is important to consult with a different legal professional to obtain a comprehensive understanding of your legal options.
While a cold-comfort letter may indicate a client’s dissatisfaction, it is not typically used as a formal complaint against a lawyer. If you have concerns about your lawyer’s conduct or performance, it is advisable to follow the appropriate procedures outlined by your local bar association or regulatory body.
This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.
This glossary post was last updated: 17th April 2024.
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