LATEST ANALYSIS
September 2008
29 Sep 2008
Evidencing optimism that the U.S. financial system will emerge from its current funk, the Securities and Exchange Commission (SEC) has continued to move forward with two new rulemaking projects. As all eyes are fastened to the bailout initiative wending its ways through Washington, these initiatives may have escaped the radar screens of practitioners.
29 Sep 2008
Certain companies are attempting to protect themselves from being dragged deeper into the credit crisis, particularly the events surrounding Washington Mutual (WaMu). To remind our crisis-weary readership, the last several days have witnessed WaMu’s forced seizure, asset sale and bankruptcy filing, marking the largest bank failure of a United States in history.
29 Sep 2008
WaMu’s seizure and resale marks yet another wrinkle in a head-spinning week’s worth of events. It gives pause for many reasons, not least of which are the lessons to be learned about Private Equity funds’ roles in bank recapitalizations.
29 Sep 2008
As is well known by the time of publication, lawmakers are attempting to put through a bailout plan, intended to save the U.S. financial markets. Titled the Emergency Economic Stabilization Act of 2008 (EESA), its creation has led to a series of cautious cheers emanating from Washington. These are not undeserved, given the depth of uncertainty and gloom otherwise pervading.
29 Sep 2008
With all of the recent chaos surrounding solving the financial crisis, we at Westlaw Business figured it might be a good time for a brief re-cap of the events unfolding. If you’re as busy as we are, a short update might be appreciated.
29 Sep 2008
The government's now-delayed bailout law, EESA, has at its core a program for the acquisition and disposition of troubled assets, termed TARP, for the Troubled Assets Relief Program. TARP is modeled in the minds of many after the Resolution Trust Corporation (RTC). The government created the RTC in 1989 as a vehicle to bailout the U.S. financial system after incurring massive financial failures related to the Savings & Loan crisis. The RTC was later disbanded in 1995.
29 Sep 2008
While the proposed bailout plan is now stalled, its focus was primarily on the exposure of the financial services world to mortgage related securities and related losses, lurking just beneath that surface is another set of credit-related woes affecting the asset-backed securities industry.
25 Sep 2008
While Congress and the White House hammer out the details supporting Treasury Secretary Hank Paulson’s proposed $700 billion Wall Street bail out, third parties have already begun escalating their grievances to the Judicial Branch.
25 Sep 2008
On the heels of quick responses by both the Treasury Department and Securities and Exchange Commission in attempts to cure market failures to calm investor panic, net asset values of several money market funds with substantial holdings in failing financial firms like Lehman Brothers Holdings Inc. plummeted to zero.
25 Sep 2008
The Federal Reserve relaxed ownership requirements for Federal Bank Holding Companies this week allowing private equity firms and hedge funds to dramatically increase their investment and participation levels in BHCs without subjecting themselves to regulation under the Bank Holding Company Act of 1956.
24 Sep 2008
Lehman Brothers’ failure to attract an appropriate suitor left the investment bank with only one real option: file for bankruptcy and liquidate remaining valuable assets. This is one of a 2-part series on Lehman and its strategies.
24 Sep 2008
Lehman Brothers’ bankruptcy and asset sales show the firm to be the beneficiary of some very clever legal advice. The particulars of the bankruptcy filing and asset liquidation show just how much. This is the second installment of a series on Lehman and its strategies.
24 Sep 2008
Congress is calling for a compromise with the White House on the proposed Wall Street bailout plan. In exchange for the $700 Billion from taxpayers, leaders from both the House and Senate are demanding tighter restrictions on executive compensation for those firms involved in the bailout.
24 Sep 2008
Could a shareholder vote quash Merrill Lynch & Co.’s deal to be acquired by Bank of America? A close reading of Merrill’s merger agreement suggests that shareholders indeed could block the transaction pursuant to the agreement’s “force-the-vote” clause.
24 Sep 2008
In an effort to avoid the perils of Bear Stearns, Lehman Brothers, and Merrill Lynch & Co., Morgan Stanley made 2 moves this week to strengthen its capital position. First, it opted to swap easier access to cheap capital for increased government oversight. Second, it announced a planned investment by Mitsubishi UFJ Financial Group, Inc. Both are discussed below.
22 Sep 2008
The big news this week around Lehman’s filings was, of course, its filing for bankruptcy. Little noticed among these filings was the twist in Lehman’s approach to filing with the SEC about its bankruptcy. Monday brought Lehman’s announcement that Lehman Brother Holdings Inc. had filed for bankruptcy.
22 Sep 2008
In the aftermath of Lehman Brothers Chapter 11 filing, companies have been eager to protect their own businesses by disclosing the extent to which they have a relationship with the failing investment bank.
22 Sep 2008
The recent events on Wall Street have caused the SEC, Treasury and Federal Reserve to act in concert to address the turmoil and attempt to calm the markets. They have also worked with the Financial Services Authority of the United Kingdom because of the global reach of these events.
22 Sep 2008
Investment bank Lehman Brothers filing for Chapter 11 bankruptcy protection set the pace for one of the most turbulent weeks in Wall Street’s history. Lehman’s bankruptcy filings disclosed that it held $639 billion in assets and $613 in outstanding debt, making Lehman’s filing the largest bankruptcy in US history (by assets held).
22 Sep 2008
The Glass Steagall Act, enacted in the aftermath of the Crash of 1929, was designed to avoid commercial banks engaging in overly risky financial markets. One could be forgiven for a sense of déjà vu, pre Glass Steagall– given the events of the last few days.