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OLA After SPOE/SPE

OLA After SPOE/SPE. Stephen J. Lubben Harvey Washington Wiley Chair in Corporate Governance ,  Seton Hall Law School Dealb%k , In Debt Columnist. Junk Heap (receivership estate). Bridge Bank. Operating Cos. A Parent Company Under SPOE. Assets. Use. Secure Loan From FDIC

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OLA After SPOE/SPE

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  1. OLA After SPOE/SPE Stephen J. Lubben Harvey Washington Wiley Chair in Corporate Governance, Seton Hall Law School Dealb%k, In Debt Columnist

  2. Junk Heap (receivership estate) Bridge Bank Operating Cos. A Parent CompanyUnder SPOE

  3. Assets Use Secure Loan From FDIC Forgive to Recapitalize Subs • Equity in Subs • Payables From Subs The only source of liquidity for the entire group? And an additional source of recapitalization for the group? Parent Company Assets in the Bridge

  4. SEC. 210. POWERS AND DUTIES OF THE CORPORATION. (n) Orderly Liquidation Fund.— (6) Maximum obligation limitation.—The Corporation may not, in connection with the orderly liquidation of a covered financial company, issue or incur any obligation, if, after issuing or incurring the obligation, the aggregate amount of such obligations outstanding under this subsection for each covered financial company would exceed— (A) an amount that is equal to 10 percent of the total consolidated assets of the covered financial company, based on the most recent financial statement available, during the 30-day period immediately following the date of appointment of the Corporation as receiver (or a shorter time period if the Corporation has calculated the amount described under subparagraph (B)); and (B) the amount that is equal to 90 percent of the fair value of the total consolidated assets of each covered financial company that are available for repayment, after the time period described in subparagraph (A). The Limitations of FDIC Lending

  5. Chapter 11 was seen as lacking in AIG, so presumably it needs to change • At very least, need to harmonize with OLA • Speed • Swaps • And Liquidity The Chapter 11 Backstop (Where is it?)

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