As a leading advisor to many of the largest and most systemically important U.S. and non-U.S. banking entities in the world, our integrated global practice plays a pivotal role in matters related to the turbulent economic landscape and sweeping regulatory reform.
Global Regulatory Reform
We are actively advising many of the world’s largest financial institutions on the implications of the increasingly complex regulatory landscape on their businesses. Our work includes counseling U.S. and non-U.S. financial institutions on:
- The implications of Dodd-Frank for their business operations, including new capital requirements, limits on M&A activity and executive compensation, and new regulations for private equity fund and hedge fund managers, systemically important financial institutions, and the securitization market.
- Issues arising from the EU Commission's financial regulatory reform program, including EU regulation of private equity and hedge funds under the EU Alternative Investment Fund Managers (AIFM) Directive; new rules on derivatives under the EU Regulation on Market Infrastructure (EMIR) and proposed amendments to the Markets in Financial Instruments Directive (MiFID II and MiFIR); stringent rules on executive compensation (CRD III); proposed reinforcement of bank capital requirements under Basel III (CRD IV); regulation of credit rating agencies (CRA II and III); and numerous other initiatives.
- Legal and compliance aspects of operational risk management; activity expansion and evaluation; liquidity, stress-tests, and fund raising work; the structure of proprietary trading and private investment fund activities; and compliance with the Volcker Rule.
- The development of recovery and resolution plans under U.S. and European requirements.
Lawyers in our 14 offices are working seamlessly across all disciplines to advise our clients on these developments, with particular emphasis on banking and financial institutions, bankruptcy and restructuring, corporate governance, derivatives, executive compensation and ERISA, structured finance, and tax.
Dexia in Restructuring and Nationalization Plans
As lead counsel to long-standing client Dexia, we are advising on virtually all transactions and structural measures undertaken to implement the bank’s restructuring process and to shore up its liquidity position, including corporate governance / boardroom advice, the €90 billion sovereign guarantee arrangements, EU state aid aspects, as well as the following M&A assignments:
- The €4 billion sale of Dexia Bank Belgium (DBB) to the Belgian State.
- The €730 million sale of Dexia Banque Internationale à Luxembourg.
- The proposed sale of Dexia’s 50% stake in RBCDIS, a joint venture with Royal Bank of Canada.
We are also counseling the Belgian State and Société Fédérale de Participations et d’Investissement (SFPI) with respect to the U.S. regulatory aspects of these transactions and DBB’s U.S. investments and subsidiaries.
Practices: M&A, Bankruptcy and Restructuring, Antitrust and Competition, Banking and Financial Institutions, Corporate Governance, and Tax
Offices: Brussels and New York
AIG’s Return to the Capital Markets
In May 2011, we represented a syndicate of investment banks as underwriters’ counsel in AIG’s “re-IPO,” which raised $3 billion of capital and allowed the U.S. Department of the Treasury to sell approximately 15% of its stake in the insurer.
The complex offering required continuous amendment due to AIG’s ongoing divestiture program and obligations under a shifting regulatory framework, and necessitated coordination with local counsel in over 50 jurisdictions.
Practices: Capital Markets and Banking and Financial Institutions
Office: New York
Key Victories in Madoff-Related Litigation
No other firm has played as prominent a role in the defense of financial institutions in matters arising from the Madoff fraud and the bankruptcy of Bernard L. Madoff Investment Securities. We won several court victories in Madoff-related matters in 2011, including as counsel to:
- HSBC in obtaining the dismissal of more than $6.5 billion in common law claims brought by the Madoff trustee. Our lawyers employed a novel litigation strategy that has been widely emulated by other defendants facing claims by the trustee.
- HSBC in winning the dismissal of claims by Wailea Fund, a counterparty to an ISDA-based swap agreement with HSBC, in connection with the performance of a Madoff feeder fund.
- HSBC entities and BNY Mellon in winning the dismissal of three class actions brought on behalf of non-U.S. investors in several Madoff feeder funds.
- 17 financial institutions in the successful appeal of novel Chapter 15 jurisdictional issues brought by liquidators of the Fairfield feeder funds claiming redemption payments.
Practices: Litigation, White-Collar Defense, Securities Enforcement, and Internal Investigations, Bankruptcy and Restructuring, and Banking and Financial Institutions
Offices: London, Milan, New York, Rome, and Washington
Successful Bankruptcy Litigation
In December 2011, after two years of complex motion practice and months of negotiations, we finalized a $417 million settlement on behalf of over 40 international banks that underwrote securities issued by Lehman Brothers in the 18 months prior to its collapse. This is the largest securities class action settlement the firm has handled.
In July 2011, we advised Goldman Sachs and other creditors holding substantial derivative claims in the drafting and filing of a competing Chapter 11 plan; the negotiation of a framework that resolved approximately $10 billion in derivative claims; and the negotiation of a plan settlement agreement with multiple “big bank” derivative claims in the Lehman Brothers Chapter 11 proceedings.
We were also counsel to Colony Capital, a mezzanine lender in a multi-tiered financing of the Jameson Inns hotel chain, in a successful four-day trial resulting in the dismissal of a Chapter 11 bankruptcy petition filing by JER/Jameson Mezz Borrower II, and the granting of relief from the automatic stay to permit Colony to proceed with a foreclosure that had been stayed as a result of the bankruptcy filing. The court’s ruling is likely to have far-reaching implications for mezzanine lenders and borrowers in distressed real estate finance situations.
Practices: Litigation, Bankruptcy and Restructuring, Banking and Financial Institutions, and Real Estate
Office: New York
Complex Banking Litigation
Our securities litigation practice is defending Bank of America, Citigroup, and other leading financial institutions in mortgage-backed securities (MBS)-related fraud lawsuits stemming from the subprime mortgage crisis, brought principally on behalf of investors in MBS offerings.
In addition, we continue to defend Bank of America in ongoing securities fraud litigation arising from its acquisition of Merrill Lynch, including in the pending litigation and ongoing investigation filed by the New York State Attorney General, in private individual and class actions filed by shareholders, in derivative actions pending in several states, and in an ERISA class action.
Practices: Litigation, White-Collar Defense, Securities Enforcement, and Internal Investigations, and Banking and Financial Institutions
Offices: New York and Washington
Fund Formation Activity
We remain an active advisor to clients seeking to structure and secure commitments to private equity funds and other alternative investment vehicles. In 2011, we advised:
- Helios Investment Partners in connection with the formation of its second private equity fund, Helios Investors II, the largest pan-Africa investment fund to date.
- TPG Capital in connection with its partnership with the municipal governments of Shanghai and Chongqing, two of the largest cities in China, to raise and manage two Chinese RMB-denominated investment funds.
- TPG Opportunities Advisors in the formation of TPG Opportunities Partners II, an investment fund focused on special situations and distressed credit investments.
- Victoria Capital Partners (formerly DLJ South American Partners) in connection with the formation of its second private equity fund, Victoria South American Partners II, a Latin America-based private equity fund.
- Counsel to TPG Capital in the formation of TPG Growth II, an investment fund focused on small- and middle-market growth equity and buyout investments in developed and emerging markets.
- The Raine Group in connection with the formation of its first private equity fund, Raine Partners I.
Practices: Private Equity, Banking and Financial Institutions, Capital Markets, Executive Compensation and ERISA, and Tax
Offices: London, New York, and Washington