Duane Morris LLP

A cascade of events emanating from the downturn in the housing market and the collapse of the subprime mortgage industry has caused financial and economic consequences that have reverberated throughout the broader financial markets. The impact of these events extends to financial institutions, borrowers, public and private pension plans, ratings agencies, private equity, real estate and hedge funds, investors, insurance companies, and directors and officers of certain of these enterprises.

In recognition of the complex challenges faced by many clients, Duane Morris has formed the Credit Crisis and Subprime Lending Practice that brings together lawyers from the various disciplines best equipped to focus on these issues.

Range of Services

Corporate Compliance, Regulatory, Investigations and Litigation

Investigations are growing in number from the Department of Justice, state Attorneys General, the SEC and numerous other federal, state and local regulatory agencies. Our attorneys have guided clients through investigations by these agencies, as well as conducted internal investigations. We are experienced with the intricacies of parallel proceedings and concurrent domestic and foreign investigations. We also focus on the enforcement and defense of contractual commitments, the pursuit and defense of claims of financial fraud and other misconduct, and criminal inquiries.

Our experience includes conducting investigations on behalf of companies, individuals and government agencies in matters of white-collar criminal defense, alleged corporate misconduct and corporate regulatory compliance. We assisted the Office of Federal Housing Enterprise Oversight (OFHEO) in conducting its extensive and complex Special Examination of Fannie Mae's manipulation of accounting and earnings to trigger bonuses for senior executives. The examination resulted in a comprehensive report of more than 340 pages and an agreement by Fannie Mae to pay $400 million in penalties and enter into a significant plan of remediation. We continue to advise and provide counsel to OFHEO.

Our national Trial practice possesses the experience and depth to represent vigorously clients in lawsuits and potential litigation related to claims arising from the failure of mortgage loans and other financial products. We also defend institutional clients in class actions on behalf of shareholders and other investors in all actions involving complex financial instruments.

Restructuring/Reorganization for Both Creditors and Debtors

Our attorneys bring to the table their experience in managing the crises experienced in the 1980s and 1990s, which saw similar rounds of failures and consolidation in the subprime lending market. We assist clients seeking protection from creditors or pursue restructuring options outside of court for troubled real estate loans, mortgage-backed securities, collateralized debt obligations, financial guarantees and mortgage insurance, as well as other real estate arrangements, structures and acquisitions.

Our group represents clients seeking to recover funds loaned to subprime lenders. We also represent lenders in bankruptcy proceedings.

Real Estate

We represent sellers and purchasers of real estate portfolios. Our lawyers have provided guidance to clients seeking to take over failed projects, including minimizing the risk of successor developer liability. Our lawyers also actively participate in foreclosures, deeds in lieu and receiverships.

Equity and Debt Funding, Mergers and Acquisitions

Our attorneys have achieved prominence and stature within the global financial community as part of one of the most comprehensive financial services practices in the world. This reputation is derived from our substantial experience nationally and internationally, our comprehensive understanding of the sensitivities affecting financial instruments and the world markets, and the breadth and depth of our multifaceted financial services practice.

Our attorneys represent government and institutional borrowers as well as regional, national and international bond issuers, bond insurers, credit providers, underwriters and an ever-widening range of others exposed to risk from the tightened lending environment. We assist with issues related to tax-exempt and insurance-backed debt, including situations entailing credit rating decreases, increases in debt reset percentages and matters involving the consequences of failed bond auctions and major bond insurer downgrades. Our attorneys respond quickly and decisively to restructuring transactions and provide options for borrowers of auction and variable-rate bonds and insurance backed securities unable to sell their holdings.

We help to identify sources of funding to secure or enhance liquidity or to replace auction-rate securities with alternative short-term debt instruments. In one of the first such deals in the country, our attorneys recently completed a highly complex transaction that successfully replaced a borrower's auction-rate securities with a bank letter of credit used to back bond insurance, resulting in a dramatic drop in the bonds' interest rate and savings to the borrower in the millions of dollars over the life of the bonds.

Our attorneys assist companies in selling businesses, assets and loan portfolios, and provide strategy and counsel to clients seeking to purchase distressed assets. We also work with clients to develop and implement creative strategies to help maximize value and position them as advantageously as possible, whether they are a lawyer, seller, lender or intermediary.

"In my discussions with Duane Morris leaders, they frequently speak about how diversity within their firm has enabled them to better serve their diverse clients. They understand that investing in diversity is a wise business decision that positions them for the marketplace of the future."

Don Liu
Senior VP, General Counsel & Corporate Secretary
Xerox Corporation

At Duane Morris, achieving diversity is paradoxical. By supporting and celebrating the differences of our attorneys - and the individual strengths that they bring - our firm culture expands, fostering creative solutions for our clients. But diversity at Duane Morris does not mean that we have a certain number of diverse attorneys; true diversity means that it is no longer noteworthy to see diverse lawyers leading our practice groups or managing client relationships. Ascending to positions of leadership and greater responsibility and providing the highest levels of client service is simply what is expected of all our lawyers. Diversity is another strong asset that adds to our collective abilities to meet the needs of our clients.

Our vision of diversity at Duane Morris is to realize an environment in which our lawyers' outstanding qualities are not just measured by ethnicity, race, gender and sexual orientation, but more importantly, that our lawyers are remarkable as excellent attorneys above all else. Only then can we celebrate our differences while focusing on the common pursuit of legal excellence which everyone shares at Duane Morris.

To reach this goal, Duane Morris understands that the familiar diversity strategies and policies that most law firms have are needed. Without demanding results from such policies, most law firms are bound to fail in even achieving numerical hiring and retention goals. Duane Morris has been proactive and ambitious in its efforts to improve diversity at the firm, and has set deadlines for reaching the milestones which mark our progress. To create a more diverse law firm, Duane Morris is:

• Committed to strategically increasing our diversity levels, which is currently at 10 percent.
• Bringing together our Diversity Committee and our Hiring and Retention Committee to raise diversity as an important factor in our hiring decisions.
• Dedicated to improving retention by building upon our monitoring and mentoring program for all diverse associates.

Combining new initiatives with our longstanding diversity efforts, Duane Morris has seen increasingly positive results. In the Minority Law Journal's annual diversity survey of the nation's largest 260 firms, Duane Morris continued to improve its regional and national ranking, rising to number 136 of all firms surveyed. Our strides in Philadelphia are encouraging; in a city known for both the racial diversity of its population and the lack thereof in its law firms, Duane Morris is one of only two law firms to exceed the national average of minority partners at all law firms. Additionally, Duane Morris leads all national law firms based in Philadelphia in the number of Latino partners. Nearly 30 percent of all of our attorneys are women, and more than 20 percent of our partners are women.

In our approach to diversity, progress in racial, gender and cultural diversity cannot be measured in numbers alone. Duane Morris has focused our diversity initiatives on both increasing the number of diverse associates and addressing the challenges diverse attorneys face in building lasting careers and rising to senior and leadership positions. While several of our key practice groups are led by diverse partners and female partners, Duane Morris endeavors to create a culture which will foster a deep pool of such attorneys who can then develop into the firm's future leaders. Duane Morris understands that simply hiring diverse associates will not change the diversity of the firm; Duane Morris is working to mentor and retain diverse associates so that our progress in racial, gender and cultural diversity is also reflected at the highest levels of leadership within the firm.

Our progress on gender diversity has been profound. We have no glass ceilings: women hold positions of leadership at all levels of management at the firm. Women lead a number of our key practice groups, including our Energy, Immigration and International practices, and serve on the firm's Executive Committee. The success of our female attorneys at Duane Morris has not gone unnoticed. Barbara Adams was chair of the firm's Finance Practice until her appointment by Pennsylvania Governor Edward Rendell to serve as General Counsel of the Commonwealth. In 2004, our longtime General Counsel, Gene E.K. Pratter, was approved by the United States Senate and is now a judge for the U.S. District Court for the Eastern District of Pennsylvania.

Our efforts to improve diversity extend beyond our firm's walls. The chair of our Diversity Committee, Nolan N. Atkinson, Jr., recognized the lack of diversity in Philadelphia's legal community and formed the Philadelphia Diversity Law Group. Nolan now serves as the chair of the organization, a consortium of 25 law firms and corporations that commits to employing at least one diverse first-year law student each as a summer associate. From this program, law students of diverse backgrounds gain access to what was once an exclusive legal community, and now have the opportunity to learn and develop their legal careers with experience at Philadelphia's top law firms.

In addition to our involvement in the Philadelphia area, Duane Morris has increased our presence at national conferences and events focused on diversity. We sponsor the Hispanic National Bar Association and its job fair. Duane Morris is also a longtime supporter and sponsor of the Equality Forum, a national gay and lesbian rights organization. Duane Morris continues to sponsor the Minority Corporate Counsel Association, and is active in other associations of diverse attorneys including: the Asian American Bar Association of the Delaware Valley; the Charles Houston Bar Association; Cuban Bar Association; Korean American Lawyers Association; National American Indian Housing Counsel and the National Bar Association.

The challenge of improving gender, ethnic and cultural diversity at Duane Morris is an ongoing effort that has the support of the entire firm. Duane Morris has been at the vanguard in supporting gender diversity throughout the firm beginning a generation ago. Our diversity programs are leading to similar success in improving racial and national origin diversity at Duane Morris. But even as we share these examples of Duane Morris attorneys and our involvement in numerous legal events, associations and programs for diversity, our hope is that such examples will no longer be necessary to mention in the future. We hope that through our efforts, and the efforts of other law firms, these stories become so common that they are no longer the remarkable accomplishments they are today, but simply routine aspects of the legal world tomorrow.