Financial Institution Insolvency

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Financial Institution Insolvency

Financial Institution Insolvency

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Financial institutions, regulated or unregulated, raise unique risks for management, lenders, counterparties, customers and regulators. Dentons knows the problems faced by financial institutions’ counterparties when escalating distress, loss of industry confidence and rapidly changing pricing for securities, derivatives and loan portfolios affect the outcomes. Anticipating the needs and actions of insurance company or society regulators, investment banks, broker-dealers, savings and loans, cooperative societies and commercial banks is complex and experience is requisite.

Timing, anticipation and speed of reaction has been the key to success in Dentons’ partners’ representation of:

Bank holding company bond debt and unsecured claim holders
Commercial and residential mortgage loan company creditors and investors
Insolvent investment banks and regulated broker-dealer currency and derivative counterparties, lenders, customers, shareholders, directors and administrators, receivers and trustees
Insolvent insurance company reinsurers, lenders and shareholders
Structured finance investment vehicles and hedge fund receivers and investors
US, UK, Turkish and other bank supervisory bodies

Each representation poses a need for demonstrated Dentons’ experience, industry knowledge and dedication to assisting in the planning and implementation of successful recovery strategies.

Experience

Alliance Bank: Advising the steering committee of creditors on an innovative restructuring of Kazakhstan's Alliance Bank's US$4.5 billion debts, the first CIS bank restructuring with a cram-down mechanism under new legislation, with separate treatment for trade finance creditors. The Steering Committee comprised Asian Development Bank, Crédit Agricole Corporate and Investment Bank, Commerzbank, DEG, HSBC Bank, Bank of Singapore, JPMorgan Chase Bank N.A., Sumitomo Mitsui Banking Corporation and Wells Fargo Bank.
Cash Stores Financial Services: Representing DirectCash Bank, DirectCash ATM Processing Partnership, DirectCash ATM Management Partnership, DirectCash Payments Inc., DirectCash Management Inc. and DirectCash Canada Limited Partnership (“DirectCash”) who provides significant, ongoing daily support services to the Cash Stores and their successors.
Federal Deposit Insurance Corporation (FDIC): Advising or acting at the request of the FDIC in connection with various insolvent financial institutions regarding their orderly wind down or sale. Conducting the investigation of potential civil claims against former officers and directors of a multibillion-dollar Midwestern bank. At the time of its closure, the bank was extremely concentrated in condominium construction and conversion loans with respect to projects located throughout the US.
Financial Services Compensation Scheme: Advising on the multibillion-pound rescues of depositors in the collapsed Icelandic banks Kaupthing Singer & Friedlander, Heritable, and Landsbank, and acting separately for the UK administrators of both Kaupthing and Heritable.
First American International Bank: Representing this lender in connection with its portfolio of defaulted loans, which are often secured by mortgages on property located in New York and New Jersey. Our representation includes workouts, foreclosures and assertion of rights in bankruptcy cases. We also advised the bank on regulatory inquiries it receives from regulators, and on the sale of commercial and residential loans.
First Merchant Acceptance Corp: These cases involved a sizable automobile financing company that offered subprime lending and had multiple outstanding securitizations. It was discovered during the course of the case that senior management had altered loan delinquency data, which had been removed from the company's books days before the bankruptcy filing. We assisted the debtors in securing approval of a financing plan proposed by the strategic bidder, and facilitated the transfer of the debtor's portfolio and servicing of the outstanding securitizations to preserve value of the assets. We also structured a joint prosecution strategy addressing the altered loan delinquency data. Plaintiff's class counsel obtained recovery from the former accountants and insurers on security fraud theories, agreeing to split a portion of that recovery with the estate and its creditors.
Lending Syndicate: Acting for the lending syndicate Royal Bank of Canada, Alberta Treasury Branches and Credit Suisse for the $1.1 billion dollar reorganization of Connacher Oil & Gas Ltd.
Northern Rock: Acting as independent advisers to the Board of Directors of Northern Rock Plc, the UK bank, in connection with all matters arising from the liquidity crisis affecting the Bank and its attempted restructuring prior to nationalisation by the UK Government.
Ownit Mortgage: Representing a servicer of mortgage loans to Ownit Mortgage, one of the first subprime mortgage originators to file for bankruptcy in connection with the completion of the servicer's obligations to service mortgage loans. Lawyers with our firm also represented a purchaser of whole loans from Ownit in connection with its US$68 million repurchase claims against the estate.
Parex Bank: Advising the international bank lenders to Parex Bank of Latvia, the largest bank in the country, in connection with the restructuring of the Parex indebtedness to those lenders under two syndicated loan agreements. We negotiated with both Parex, the Republic of Latvia, as Guarantor and their English legal advisers. This was the first restructuring of a European Union financial institution.
Russian letter of credit holder: Representing in connection with Jugobanka insolvent bank proceedings by New York Superintendent of Banks.
Swedbank: Representing in multiple International Swaps and Derivatives Association and foreign exchange transaction disputes with various Lehman Brothers entities, including an appeal of first impression from an order issued in the Lehman Brothers Holdings Inc. reorganization case. The bank asserted a right to setoff funds transferred into the debtor’s deposit account after the commencement of the reorganization case against the debtor’s pre-petition obligations to the bank under various financial contracts. On appeal, the bank sought determinations that the “safe harbor” provisions of the US Bankruptcy Code permitted the bank to exercise its setoff rights against the deposit notwithstanding any other Bankruptcy Code provision that Lehman argued would limit such rights.
Temirbank: Advised this Kazakh bank on the restructuring of its US$1.5 billion of debts, comprising international and domestic notes, trade finance and governmental debt and the issue of new equity, GDRs and new international notes. This was the second restructuring (the first being Alliance) to use the new Kazakhstan restructuring law.
Turkish Savings Deposit Insurance Fund: Representing of government bank savings deposit agency in connection with collapse of IMAR Bank arising from largest bank fraud in Turkish history with respect to controlled group liability enforcement in several countries and related litigation.

News and Events

Recent Press Releases

Dentons' Luci Mitchell-Fry elected to co-chair IWIRC Board's London network

December 8, 2023

Luci Mitchell-Fry, Counsel in Dentons' Restructuring & Insolvency team based in London, has been elected as co-chair of the Board of the London International Women's Insolvency & Restructuring Confederation (IWIRC) Network.