I'm off to D.C. this morning to talk with the House Financial Services Subcommittee on Financial Institutions regarding my thoughts on Dodd-Frank’s Orderly Liquidation Authority. My written testimony is here.
Posted by
I'm off to D.C. this morning to talk with the House Financial Services Subcommittee on Financial Institutions regarding my thoughts on Dodd-Frank’s Orderly Liquidation Authority. My written testimony is here.
Comments
2 responses to “OLA and Too Big to Fail”
The Lehman sale hearing demonstrates that “transparency and speed are not necessarily incompatible?” Depending on how you view the expensive post-sale litigation in that case over, inter alia, the contents of a side letter that, although contemplated, was not in existence at the time of the sale hearing, maybe — it’s arguable, though.
The post-sale litigation in the Lehman sale was entirely the fault of Barclays and, presumably, its counsel. I will never understand why they did not go back to the court and get the clarification letter blessed by the Bankruptcy Court. Judge Peck made clear that he would be available whenever if they needed any further hearings. As evidenced by Judge Peck’s ultimate ruling in the post-sale litigation, he would have approved the sale to Barclays even on the amended terms in the clarification letter because there was simply no other alternative.
As bankruptcy lawyers, we ask the Bankruptcy Court for so many “comfort” orders where a Court order is probably not necessary, but better safe than sorry. It is shocking that Barclays didn’t take the same approach in such a complicated and significant deal.