Structuring Private Equity Investments in Failed U.S. Banks Under New Guidance to the FDIC Policy Statement and the Bank Holding Company Act

4 Feb 2010

Shearman & Sterling partner Bradley K. Sabel (New York-Financial Institutions Advisory and Financial Regulatory) and counsel Gregg L. Rozansky (New York-Financial Institutions Advisory and Financial Regulatory) and Matthew F. Musselman (Associate-Capital Markets) have authored a Client Publication, titled “Structuring Private Equity Investments in Failed U.S. Banks Under New Guidance to the FDIC Policy Statement and the Bank Holding Company Act.”  Private equity investors – drawn in certain cases by the prospect of FDIC “loss sharing” arrangements – appear willing to participate in bids for failed banks and the FDIC remains amenable to various investment structures involving such investors.

The FDIC has recently issued interpretive guidance, in the form of questions and answers, concerning the standards that the FDIC applies in accepting bids from investment vehicles and other so called “private investors” to acquire failed banks and thrifts. The guidance reflect the FDIC’s ongoing effort to strike a balance between the competing interests of attracting new potential investors in failed banks and creating eligibility standards for non-bank acquirors — including private equity firms — that will help ensure the long-term financial strength and prudential management of a bank or thrift emerging from receivership.

Loading...
Share This Page Connect With Us
 
X