Restructuring

Harvey Miller and Maurice Horwitz have published an article in the Harvard Business Law Review Online, entitled “One Way That Dodd-Frank’s Liquidation Authority Could Achieve Parity With The Bankruptcy Code,” in which the authors discuss one of the criticisms of the orderly liquidation authority created by Dodd-Frank for the resolution of systemically important financial institutions – i.e., that creditors lack the same degree of certainty with respect to their probable treatment under an FDIC receivership as compared with the bankruptcy process.  The authors argue that under Dodd-Frank, as it is currently drafted, any potential outcome for creditors under an FDIC receivership depends disproportionately more on the subjective value determinations of a single party — the FDIC receiver — than would ever be the case in a chapter 7 bankruptcy, and that for the process to achieve parity with the Bankruptcy Code, such value determinations should be placed in the hands of independent third party arbiters.
To read the article, please follow this link.
To learn more about Weil’s Financial Regulatory Reform Working Group, please follow this link.
Posted in Financial Regulatory Reform Center