Arnold & Porter Kaye Scholer LLP

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.

Kaye Scholer is committed to fostering diversity in a positive and supportive work environment. We firmly believe that a diverse group of lawyers, including differences in race, ethnicity, gender, sexual orientation, disability, religion or any other underrepresented status in the legal community, increases the value of our law firm, strengthens our firm's ability to attract talented individuals, and enhances our ability to retain and serve our clients.

Our commitment to cultivate and maintain a diverse workforce remains at the core of our recruiting, retention and promotion efforts as we strive to maintain a firm culture that taps into the potential of every Kaye Scholer employee.

The Diversity and Recruiting Committees work together, recruiting at job fairs such as the BLSA Northeast Job Fair and the DuPont Minority Job Fair. We conduct on-campus interviews at law schools, and we actively seek out diverse candidates at every school. Kaye Scholer is an original signatory to the Statement of Goals of New York Law Firms and Corporate Legal Departments for Increasing Minority Hiring, Retention and Promotion, and we have surpassed the goals in each of the years of their existence. We are also an original signatory to the Statement of Goals of New York Law Firms and Corporate Legal Departments for the Retention and Promotion of Women, and we have participated in the City Bar Fellowship Program since its inception.

Kaye Scholer was the recipient of the 2006 "Black Entertainment and Sports Lawyers Association Law Firm Diversity Award" at the 26th Annual Conference of the Black Entertainment and Sports Lawyers Association (BESLA). The "Conference Chairs' Welcome," published in the "Conference Journal" distributed to all attendees, said about Kaye Scholer: "Our Law Firm Diversity Award recipient this year is the law firm of Kaye Scholer, LLP. With offices from New York to Shanghai, and points in between, this firm has made significant contributions to the entertainment legal community. We acknowledge Kaye Scholer for being a consistent supporter of BESLA and its programs, a corporate sponsor of BESLA's conferences, and for its continuous efforts in the areas of diversification by recruiting and hiring qualified minority professionals, including in particular, members of this organization."

Our partners' commitment to diversity extends beyond the firm. Sheila Boston, a partner in Kaye Scholer's Litigation Department, was named the Chair of the Committee on Recruitment and Retention of Lawyers, a committee devoted to enhance diversity in the profession at the Association of the Bar of the City of New York. This special committee is charged with encouraging the hiring, retention and promotion of professionals from all walks of life in New York law firms and corporate legal departments. All of us at Kaye Scholer take great pride in her appointment, and we pledge our full support to the work of her committee in this important area.

Last year Kaye Scholer entered into a partnership with the Bronx School for Law, Government and Justice. Kaye Scholer attorneys have coached the school's mock trial team in a state competition, conducted a mock labor negotiation with the students, and judged several moot court competitions at the school. Next year we will initiate a mentor program.

Other organizations in which our partners are involved include the Asian American Bar Association of New York, Committee 504 (Minorities and Women in the Profession) of the ABA's Intellectual Property Law Section, Legal Momentum, The Women's Legal Defense & Education Fund, Inwood House, Just One Break, National Association of Women Lawyers (NAWL), American Bar Association's Section of Litigation's Women In Products Liability (WIPL), National Hispanic Bar Association, and Black Entertainment and Sports Lawyers Association (BESLA).

We are proud to have received several awards recognizing our commitment to offering equal employment opportunities to all.

Diversity Statement from Managing Partner

At Kaye Scholer LLP we are proud of our commitment to diversity and equal opportunity. We work actively to foster an inclusive work environment, support minority-owned vendors and enrich our firm's culture through our diversity and inclusion initiatives for lawyers and staff.

The firm's commitment to diversity and equal opportunity is reflected in its mission to attract, retain, and advance a diverse group of lawyers and staff. Kaye Scholer is home to individuals from varied cultural, educational, religious and ethnic backgrounds, making it a vibrant and engaging community. We strongly believe that promoting diversity in background and perspective strengthens our entire firm.

At Kaye Scholer, we recognize that diversity among our professionals is a necessity if we are to best serve the needs of our increasingly diverse clientele. Kaye Scholer enthusiastically supports programs designed to ensure that our own makeup adequately reflects the growing ranks of diversity in business today. Our commitment begins early, when we urge summer associates to meet with more senior lawyers to develop enduring mentoring relationships. Our affinity group programs continue to support our attorneys as they develop in their careers. Kaye Scholer has an active Diversity Committee consisting of approximately thirty attorneys of all levels of seniority, including partners, counsel, senior attorneys and associates. Working through various subcommittees, the members of the Diversity Committee assist in attracting and hiring a diverse class of attorneys, promote community-building, and provide training as well as host events that promote awareness of diversity issues.

We at Kaye Scholer are committed to fostering and maintaining an inclusive work environment where individual differences among us are respected, valued and recognized as a source of strength of the firm. We believe that offering diverse perspectives to our clients enhances our counsel and sparks intellectual energy within the firm.

Barry Willner
Managing Partner

Diversity Training

All Kaye Scholer lawyers participate in the Firm's mandatory diversity training program. Diversity training sessions are composed of a combination of partners, counsel and associates from various departments in the Firm. Through discussion, videos and case studies, the program enables participants to gain insight into the different viewpoints and workplace challenges of both their peers and others.

Mentoring Program

In 2008, the Firm rolled out a revised mentoring program designed to assist associates' career development and enhance their experience at the Firm. Highlights of the program are:

• all associates are paired with mentors for a period of at least two years at a time
• associates are encouraged to select rather than be assigned mentors
• virtually all mentor/mentee communications are confidential

In addition, there are four Program Coordinators who monitor the mentoring relationships to ensure that mentors and mentees are meeting in a timely fashion, to ensure that the mentor-mentee pairings are appropriate and to evaluate the extent to which the program is functioning successfully.

Ombuds Program

Recently, the Diversity Committee established an Ombuds Program, a confidential resource for all attorneys. The Ombuds Representatives are neutral confidants who advocate not for a specific individual, but for equity, fair process and compliance with firm policy and procedure. The program was established with a special emphasis on issues concerning women, minorities, sexual orientation and religion. The Ombuds Representatives are available, however, to assist all attorneys in resolving work-related concerns in an informal, confidential and impartial manner. The primary goal of the program is to improve the overall working environment at Kaye Scholer.

Affinity Groups

The Firm recognizes the importance of active affinity groups for lawyers who share common interests or backgrounds. With the Firm's support, our attorneys have voluntarily formed African American, Latino, Asian, Women and Lesbian, Gay, Bisexual and Transgender (LGBT) affinity groups. Participation in these affinity groups accelerates professional development, provides additional mentoring opportunities and increases networking opportunities. 

Diversity Events

Kaye Scholer is a proud participant and sponsor of a wide range of programs that celebrate and promote diversity in the legal community. The Firm's Diversity Committee believes that exposure to diverse speakers and points of view promotes professional development and growth. The Committee has hosted several speakers, panel discussions and movie nights. Recent speakers include Clarence B. Jones, a speech writer and attorney for Martin Luther King Jr., as well as lawyers from the NAACP Legal Defense Fund, the Puerto Rican Legal Defense and Education Fund (PRLDEF), the Asian American Legal Defense and Education Fund (AALDEF) and from Lambda Legal.

Movie nights have become a tradition at the Firm. The Diversity Committee arranges screenings of thought-provoking films such as "Crash" and "The Namesake." The movie is followed by a lively and stimulating discussion of the diversity and community issues that the film addresses.