Revisiting Bank Receiverships: Operation of Bridge Banks, Disposition of Failed Bank Assets, Concerns for Existing Borrowers, and Risks for D&Os
Implications of Recent Bank Failures: Deposit Insurance, Bank Term Funding Program, Risk Management
Recording of a 90-minute premium CLE video webinar with Q&A
This CLE webinar will examine certain legal and regulatory issues arising out of the bank receiverships in the wake of the Silicon Valley Bank (SVB), Signature Bank (SB), and First Republic Bank (FRB) failures. The panel will discuss the FDIC's general receivership authority, the formation and operation of bridge banks, the disposition of bank assets of failed banks, deposit diversification strategies, and the effect of receivership on existing loans in a bank's portfolio. The panel will also discuss possible changes in regulatory requirements, deposit insurance, and risk management monitoring that will likely result from recent bank failures, as well as lessons for boards of directors in properly exercising their fiduciary duties. Last, the panel will discuss risks posed to the directors, officers, and other institution-affiliated parties of failed banks and spillover considerations for sound corporate governance.
- Silicon Valley Bank, Signature Bank, and First Republic Bank: reasons behind their closures
- Formation and operation of a bridge bank vs. a receivership
- Disposition of assets through a bridge bank as opposed to receivership
- Bank Term Fund Program: eligible institutions and required collateral
- Deposit insurance: actions taken in connection with SVB and SB, potential expansion for banks generally
- Managing risk associated with bank assets: interest rate and duration
- Risks for former officers, directors, and institution-affiliated parties of failed banks
- Lessons learned for corporate governance
The panel will review these and other critical issues:
- What factors led to the closures of SVB and SB, and what are the current risks for other banks?
- Why did the FDIC create bridge banks in each instance as opposed to simply putting the banks in receivership?
- What actions should borrowers under an existing credit facility take in response to a receiver's repudiation of an unfunded commitment?
- Who is eligible to draw funds under the BTFP, and what kinds of collateral must be posted?
- What should officers, directors, and institution-affiliated parties of insured depositories and business management be mindful of after the recent bank failures?
Luigi L. De Ghenghi
Davis Polk & Wardwell
Mr. De Ghenghi focuses on bank regulatory advice, including Dodd-Frank Act implementation, M&A and capital markets... | Read More
Mr. De Ghenghi focuses on bank regulatory advice, including Dodd-Frank Act implementation, M&A and capital markets transactions for banks and other financial institutions. He advises banks and financial institutions on corporate governance and compliance matters, bank insolvency issues, government investigations and enforcement actions, cross-border collateral transactions, clearance and settlement systems.Close
Partner, Co-Chair, Financial Services Practice, Co-Chair Digital Assets and Blockchain Technology Group
Winston & Strawn
With over 29 years of legal experience, Mr. Fornaris advises a broad range of financial services firms, including banks... | Read More
With over 29 years of legal experience, Mr. Fornaris advises a broad range of financial services firms, including banks and their holding companies, money services businesses, investment advisers, securities broker dealers, gaming firms, FinTechs, cryptocurrency firms, and other institutions on all aspects of their business. He represents his clients on formation and licensing, capital-raising transactions, acquisitions and divestitures, USA PATRIOT Act/BSA/AML compliance and OFAC sanctions programs, cryptocurrency regulation, mobile money and FinTech, federal and state agency enforcement proceedings, Dodd-Frank Act compliance, and COVID-19/CARES Act economic stimulus program advice (ranging from Small Business Administration PPP loans to Federal Reserve Main Street program loans). Throughout his career, Mr. Fornaris has counseled clients in their dealings with the Federal Reserve, OCC, FDIC, FinCEN, SEC, FINRA, Florida Office of Financial Regulation, New York Department of Financial Services, and other state supervisory authorities. He is also a member of the Bank Receivership Task Force, created in March of 2023.Close
George H. Singer
Holland & Hart
Mr. Singer practices in the areas of corporate and commercial law, including finance, financial restructuring, capital... | Read More
Mr. Singer practices in the areas of corporate and commercial law, including finance, financial restructuring, capital recovery, and bankruptcy. He negotiates senior and subordinated financing arrangements and has experience with structuring credit facilities, perfecting finance documentation, and closing secured and lease finance transactions. Mr. Singer regularly represents lenders, lessors, funds, committees, business debtors, guarantors, and creditors in financial workouts, restructurings, distressed-sale transactions, intercreditor disputes, lender liability claims, successor liability issues, and preferential and fraudulent transfer litigation. He has been practicing for over 20 years and regularly advises publicly and privately held companies on corporate governance, debt and equity financings, licensing issues, and risk management. Mr. Singer serves as corporate counsel on behalf of buyers and sellers and venture capitalists in complex merger, acquisition, divestiture, and joint-venture transactions.Close