A comfort letter is a letter delivered by an issuer's independent accountants to the underwriters or initial purchasers in connection with an offering that provides certain assurances with respect to financial information included in a registration statement, prospectus, or offering memorandum used in a securities offering. Underwriting agreements and purchase agreements typically require a comfort letter be provided to the underwriters or initial purchasers as a condition at pricing. Comfort letters assist underwriters to establish a due diligence defense under the securities laws.
Partner Ryan Castillo discusses practice pointers that can help in reviewing and negotiating comfort letters. See the full video here. (Requires LexisNexis Account)
View an introductory clip below.