Bank Asset Acquisitions by Private Equity and Other Non-Bank Investors

Navigating Federal Regulations and Policies in Structuring Transactions

Recording of a 90-minute CLE webinar with Q&A


Conducted on Tuesday, December 1, 2009

Recorded event now available

or call 1-800-926-7926
Program Materials

This CLE seminar will analyze the legal challenges that private equity funds and other non-bank investors face when investing in financial institutions, recent changes in regulatory policy and asset sale programs, optimal investment deal structures, and best practices for dealing with the banking regulators.

Description

In the past year, the Federal Reserve liberalized regulatory requirements of the Bank Holding Company Act to entice non-bank investors to invest in troubled banks. The IndyMac deal and recent sale of BankUnited Financial to a group of private equity firms have spurred interest by non-bank investors.

The FDIC’s August 2009 Statement of Policy sets forth its terms for evaluating acquisitions of financial institutions by private investors. While the rules treat private equity investors somewhat differently and more strictly than other investors, it does signal much more flexibility by the regulators.

The FDIC’s loan portfolio sales offer unique opportunities for investors to buy distressed assets of failed banks in a joint venture format or with FDIC financing. The recent real estate loan sale to a group led by Starwood Capital and the PE firm TPG merits close attention by private investors.

Listen as our authoritative panel of banking attorneys discusses the opportunities for private, nonbank investors to invest in failing banking institutions or purchase distressed loan assets, the challenges and pitfalls facing private investors, and strategies for negotiating with banking regulators.

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Outline

  1. Obstacles for non-bank investors in banking organizations
    1. Consequences of “control” by investor
    2. Control rules
    3. Solutions to control dilemma
    4. Federal Reserve Policy Statement (September 2008)
  2. FDIC Statement of Policy (August 2009) applicable to private equity
    1. Capital commitment
    2. Source of strength
    3. Cross support liability
    4. Transactions with affiliates
    5. Term of ownership
    6. Prohibited ownership structures
    7. Required disclosures
  3. FDIC sale of distressed assets of failed institution receiverships
    1. Loan portfolio sales
    2. Structured loan transaction program
    3. Legacy loan program pilot

Benefits

The panel will review these and other key questions:

  • How can private investor deals be structured to avoid the control rules of the BHCA or the SLHCA?
  • How do federal regulators judge proposed private equity investments?
  • Will the FDIC's August 2009 Policy Statement on private equity investments encourage more private equity and other non-bank investors to look at failing financial institutions?
  • How can private investors purchase loans from the FDIC?

Faculty

Daniel Keating
Daniel Keating

Partner
Hogan & Hartson

His practice involves representing financial services and technology clients in a variety of corporate and securities...  |  Read More

Beth S. DeSimone
Beth S. DeSimone

Counsel
Arnold Porter

She practices in the financial institutions area where she structures and negotiates mergers and acquisitions and...  |  Read More

Additional faculty
to be announced.

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