• Congress and the FDIC Propose to Require Companies to Prepare Living Wills
  • June 8, 2010 | Authors: David L. Ansell; Robert H. Ledig; Gordon L. Miller; Thomas P. Vartanian
  • Law Firm: Fried, Frank, Harris, Shriver & Jacobson LLP - Washington Office
  • The historic financial reform legislation moving toward passage in Congress is expected to require that all financial organizations deemed “too big to fail” have a “living will.” Living wills would be written at a time when an organization’s principal responsibilities are to its shareholders and bondholders, but the purpose of a living will would be to facilitate the liquidation of the organization if the government was appointed as receiver. Current battles among the Federal Deposit Insurance Corporation (FDIC), shareholders and creditors arising from the failures of Washington Mutual, Downey, Colonial and other banks and thrifts suggest that drafting a living will that takes into account the rights of all interested parties will be a difficult task.