Financial Recovery

Congress Passes Emergency Economic Stabilization Act; Holland & Knight Establishes Financial Recovery Team to Address Crisis

On October 3, 2008, Congress passed and President Bush signed into law the Emergency Economic Stabilization Act of 2008 (the Act), which is intended to increase the stability of the U.S. economy by providing relief to financial institutions whose existence has been endangered by the worldwide credit crisis.

The Act establishes the Office of Financial Stability and a three-tranche program to purchase an aggregate of up to $700 billion in "troubled assets" (residential or commercial mortgages, and any securities or obligations based on those mortgages) from financial institutions, as well as a program to insure the payment to financial institutions of principal and interest on troubled assets not sold.

The Act also contains a number of tax provisions aimed at providing relief for financial institutions and homeowners, and provisions preventing government subsidization of excessive executive compensation. Additionally, the Act contains energy and disaster relief, and tax extenders that were added to the legislation after it failed to pass on September 29, 2008.

Heightened Regulatory Environment, Contract Opportunities and Uncertainty in Financial Markets

Holland & Knight has formed a Financial Recovery Team to assist clients with the dramatic and unprecedented developments in the global financial markets. This interdisciplinary group of lawyers and professionals from around the country has significant experience in banking regulations, government contracts, finance, government relations, real estate, business issues and litigation. They will counsel clients on the issues and opportunities facing them during this uncertain time. The team includes:

• Government, Public Policy and Regulatory Practice lawyers and professionals who are well acquainted with the Senate Banking and House Financial Services Committees, the Congressional leadership, Treasury Department, Federal Reserve, FDIC, Senate Finance, House Ways & Means and related agencies and institutions. Our team works with key officials on a bipartisan basis and includes former members of Congress, former Congressional staff and former senior administration officials. The team also includes a number of bank and bank holding company regulatory lawyers with vast experience dealing with state and federal bank regulators.
• Real Estate, Finance, Securities, and Restructuring, Bankruptcy and Loan Workout lawyers and professionals who understand the structure and complexity of securitization transactions, including the underlying assets and the securities issued in connection with such transactions, and who are experienced in public/private transactions, as well as the disposition of distressed real estate and real estate-related assets as single assets and in portfolios, and loan workouts and restructurings. Our lawyers advise clients dealing with the issuance of asset backed securities, government agencies in real estate-related transactions nationwide, in public/private partnerships and in the disposition of loan and real estate assets. Our team includes lawyers who held senior positions in government during the financial crisis of the early 1990s and many lawyers who interfaced with the government in resolving that crisis which included moving real estate loan assets back to the private sector.
• Corporate Compliance and Governance and White Collar Defense lawyers and professionals who regularly advise companies on the design and implementation of compliance and ethics programs, including anti-corruption components, which can be used to protect both companies and management in the event of a government investigation. The Department of Justice and the SEC have already opened more than 30 investigations into potential legal and regulatory violations. Holland & Knight has numerous former federal prosecutors and SEC enforcement lawyers who understand how to protect companies and individuals who face what are frequently parallel civil, regulatory and criminal investigations.
• Government Contracts lawyers and professionals who regularly operate in the intersection of public agencies and private companies. They have been scrutinizing the Act's description of the intended legal relationship between the Treasury Department and the financial and managerial firms that are being approached to provide services in asset management, auctions, accounting and other areas, and are familiar with applicable conflict of interest laws and principles. Our lawyers have noted that notwithstanding the Act's intention to streamline and expedite the recovery process, Treasury's actions are expressly made subject to the remedies available under the Administrative Procedure Act.

Though details remain to be determined and the government's financial stabilization program is still in the early stages of implementation, it is clear that the scope of authority granted to the Treasury Department by the Act will have a far-reaching impact and will transform the business and political landscape of the financial, banking, housing/finance, real estate industries and global markets for the foreseeable future.

Holland & Knight's Financial Recovery Team is closely monitoring developments related to these difficult, unprecedented market conditions so that we are prepared to address the needs of our clients and friends. If you would like more information on the evolving impact on financial institutions, individuals and other corporate entities, please contact a member of our team to learn how we can help you at 202-955-3000.

US and Global Financial Crisis: New Business Opportunities and Pitfalls in a Highly Regulated and Legislative Environment (Webinar Recording)

The current financial crisis has created a wealth of contracting, asset acquisition and other business opportunities. Significant pitfalls exist for the unwary, however, as numerous federal regulatory agencies and Congressional committees eye imposing strict and potentially costly new regulations on businesses. Further, the U.S. government and foreign governments are in agreement that the international financial system and its institutions must be fundamentally reformed, likely resulting in a radically altered global financial landscape. To help you better understand the opportunities and constraints on your business, Holland and Knight’s Financial Recovery Team invites you to a conference/discussion to address these unprecedented legal, regulatory and legislative changes in the U.S. and global markets.

Presenters: Hon. Gregory W. Meeks, Michael C. Flynn, and Sabeth Siddique

VIEW WEBINAR (Free registration required)