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Practice/Industry Group Overview
Recent developments in the domestic and global financial markets have presented unprecedented challenges to all market participants. Kaye Scholer’s lawyers have the expertise, commitment and commercial acumen to react swiftly and effectively in this rapidly shifting environment and to assist our clients as they face unprecedented challenges. Our Financial Markets Recovery Group is an interdisciplinary practice that integrates attorneys with broad experience in financial markets and in-depth expertise in providing solutions to the unique legal challenges that arise in our current environment.
Our Financial Markets Recovery Group includes attorneys from the following practice areas:
- Structured Finance & Derivatives
- Real Estate Finance
- Business Reorganization & Creditors' Rights
- Investment Funds
- Leveraged Finance
- Private Equity
- Governmental Relations & Contracting
- Litigation & Governmental Investigations
- Tax
From the Beginning
From the beginning of the current financial crisis, our Financial Markets Recovery Group attorneys have been involved in many of the largest and most complicated restructurings and troubled asset portfolio sales and liquidations. We have represented clients in a broad range of recent matters relating to current market conditions, including:
- Restructurings and insolvencies involving large mortgage companies such as American Home Mortgage, New Century Homes, and C-Bass, including advising on master repurchase agreements, swap transactions, sales of servicing businesses and counseling on in-court and out-of-court remedies for creditors.
- Sales of troubled assets by a major global financial institution under a foreign government sponsored program.
- SIV, SIV Lite, CDO and CLO, restructurings, recapitalizations and liquidations including issues associated with UCC foreclosure and sale remedies, receiver sales, conflicts between senior and subordinated creditors, and indenture trustee and tax characterization concerns.
- Documenting and advising on private sales of large pools of distressed structured credits.
- Designing complex and tax-efficient funds to house pools of capital to acquire distressed portfolios of securities, whole loans and synthetic products, and enter into derivatives to transfer or hedge counterparty risk exposure.
- Documenting and advising on derivatives transactions and repurchase agreements documented under ISDA Master Agreements, Credit Support Annexes and related documents, including advising on termination rights, set-offs, netting rights, dispute resolution provisions and recovery of posted collateral as well as unwinding complex derivatives as part of leveraged finance restructurings.
- Commercial mortgage loan and mezzanine loan restructurings, workouts, foreclosures, conveyances in lieu of foreclosure, and discounted pay-offs, including workouts of securitized loans; real-estate related bankruptcies and insolvency proceedings.
- Loans to SPEs holding eligible assets that have been conveyed by distressed financial institutions, equity sponsors and other counterparties.
- Sales and purchases of large portfolios of performing and non-performing commercial mortgage and mezzanine loan products in the secondary market; sales and transfers of portfolios of residential mortgage loans and related servicing rights.
- Advising clients in transactions with distressed, in-default and insolvent lenders as well as advising on counterparty and insolvency risks affecting equity sponsors and borrowers under loan facilities.
- Structuring and advising on the acquisition of undervalued companies and financial institutions.
- Defending against attacks on special purpose structures from trustees, liquidators and creditors in U.S. and non-U.S. courts.
- Structuring transactions involving the sale of troubled private equity commitments with a view towards minimizing withholding taxes and trade or business tax risks.
Kaye Scholer's Financial Markets Recovery Group draws upon our considerable and collective experience to reach innovative solutions in the financial markets. We were engaged early in the current financial crisis - advising clients on outcome-maximizing strategies for the effects of the sub-prime and mortgage underwriter business failures of 2007. We represented clients in connection with $3 billion in master repurchase agreements with New Century and its affiliates, including actions to terminate the repurchase agreements and advising the lender through New Century's Chapter 11 proceeding. Likewise, we represented a global financial institution in connection with the unwinding of its master repurchase agreements in the Bear Stearns hedge fund matters. Additionally, we represented clients in a series of transactions involving American Home Mortgage, Inc., one of the largest mortgage company insolvencies to date.
Also of note, our Financial Markets Recovery Group has been instrumental in representing a major global financial institution in connection with structuring, negotiating and executing the sale of multiple classes of troubled assets with a value of $60 billion to a special purpose vehicle created by a governmental entity to provide balance sheet relief to the financial institution. The representation included assisting on the structuring of the financing of such sale, addressing issues arising from the U.S., European and Asian jurisdictions involved, and the risk-transfer of derivatives positions to the special purpose partnership.
We have been integrally involved in the restructurings of many of the largest SIVs, SIV Lites, CDOs, CLOs and monoline insurers as well as several large and complex real estate and mortgage-related insolvencies and restructurings. In each case, our experienced teams of attorneys have worked jointly and seamlessly to bring about the best possible outcome for our clients - often developing unique solutions that were later broadly adopted in the market.
Our group has distinguished itself in creating liquidity and balance sheet solutions for our diverse client base. In addressing troubled leverage finance transactions, our attorneys utilize their in-depth understanding of commercial loan terms, subordinated and mezzanine debt financings, high yield offerings and complex debt and swap instruments. We count among our clients: global financial institutions, investment banks, hedge funds and specialist advisory groups.
Our extensive client base puts Kaye Scholer's Financial Markets Recovery Group in a unique position to assist clients to identify investment and restructuring opportunities in today's environment. Our attorneys have extensive experience with hedge funds, private equity funds, hybrid funds, sovereign-wealth funds and alternative sources of capital.
As governments around the world intervene in an attempt to strengthen balance sheets of major banks, preserve capital, and increase liquidity, Kaye Scholer's relationships and experience, negotiating both with and on behalf of governmental bodies, is invaluable. We have the capacity to represent clients in all areas of government contracting.
Over half of Kaye Scholer's 500-plus lawyers are engaged in assisting clients with a wide variety of complex commercial disputes. The experience of our Financial Markets Recovery Group's litigation and governmental investigations attorneys, with their detailed knowledge of special-purpose structures and white-collar investigations, enable us to assess risk with clarity and precision in order to efficiently manage the process with an eye towards maximizing our client's recovery and minimizing their civil and criminal exposure.
The breadth and depth of our experience enables our Financial Markets Recovery Group to address, on behalf of our clients, the most difficult issues arising in today's marketplace.
Representative Transactions
Government Sponsored Programs
Representation of major global financial institution in connection with structuring, negotiating and executing the sale and financing of multiple classes of troubled assets with an aggregate value of $60 billion to a special purpose vehicle created by a governmental entity to provide balance sheet relief to the financial institution.
Asset Sales
Representation of major global financial institution in connection with its sale of a portfolio in excess of $20 billion in face amount of RMBS to an investment fund managed by a major equity advisor.
SIVs and SIV Lites (Cheyne, KKR, Victoria Finance, Axon Financial Funding, Ottimo, Orion, Harrier, Golden Key (SIV Lite), Pace, Liberty Lighthouse and Sigma)
Representation of global banking institutions, senior noteholders and liquidity providers in connection with the restructuring of their holdings, and advising on credit linked notes and swap agreements related to the above SIVs and SIV Lites.
Derivatives
Represented financial institutions and hedge funds on rights and obligations under ISDA Master Agreements affected by recent bankruptcies of major financial institution counterparties, including termination and set-off rights and close-out netting.
ACA Capital Holdings, Vanderbilt Financial
Representation of a global financial institution in connection with multiple structured finance transactions and a revolving credit facility to ACA Capital Holdings and a loan to Vanderbilt Financial, a special purpose vehicle that buys and holds the equity tranches of CDOs.
Syndicate Agents
Representation of syndicate agent in workout of a $1.2 billion real estate construction loan facility, including enforcing remedies and engagement of backup servicer.
Monoline Insurer Matters
Representing clients in matters relating to draws on, and downgrades and restructurings of, monoline insurers (including MBIA, FGIC, Radian, Security Capital, PMI Group and CIFG).
Portfolio Liquidations
Representation of major international institutional lender as chief outside counsel in connection with the complete liquidation of its $10 billion commercial mortgage and mezzanine debt and equity portfolio through sales, dispositions, redemptions, workouts, restructurings and foreclosures.
Private Opportunity Funds
Representing private fund as chief outside counsel in connection with numerous acquisitions and dispositions of performing and distressed commercial real estate mortgage and mezzanine loans.
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