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.
Outline
- 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
Benefits
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?
Faculty
Luigi L. De Ghenghi
Partner
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.
CloseCarl Fornaris
Partner, Co-Chair, Financial Services Practice, Co-Chair Digital Assets and Blockchain Technology Group
Winston & Strawn
Mr. Fornaris is co-chair of the Financial Services Practice and co-chair of the Digital Assets and Blockchain... | Read More
Mr. Fornaris is co-chair of the Financial Services Practice and co-chair of the Digital Assets and Blockchain Technology Group. With nearly 30 years of legal experience, he advises a broad range of financial services firms, including banks and their holding companies, trust companies, money services businesses, payments and FinTech companies, cryptocurrency and other digital assets firms, investment advisers, securities broker dealers, gaming firms, and other financial institutions and institution-affiliated parties, including financial institution officers and directors, on all aspects of their business. He represents clients in an extensive range of regulatory, transactional, and administrative enforcement matters, including institution formation and licensing, capital-raising transactions, acquisitions and divestitures, Bank Secrecy Act/Anti-Money Laundering (BSA/AML) compliance and The Office of Foreign Assets Control (OFAC) sanctions programs—including the Corporate Transparency Act (CTA)—cryptocurrency regulation, payments and FinTech, Dodd-Frank Act compliance, failed bank receivership and resolution advice, and federal and state agency enforcement proceedings.
CloseGeorge H. Singer
Partner
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.
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