Kevin LaCroix on second wave litigation - subprime and financial crisis
Kevin LaCroix, from the D&O Diary blog, will be our guest for a webcast on Wednesday, October 1, 2008, (register here, archived here when available) on litigation during this financial crisis. Starting in the subprime, moving to a liquidity crisis, engulfing CDO’s, monoline insurance, auction rate securities and other instruments, Kevin is one of the clearest voices about potential liabilitiy in this area.
Of particular concern is the exposure of officers and directors. My reading (headline level) caught an executive compensation clawback (the opposite of our kind and gentle privilege clawback) and Kevin notes that the organization responsible for sorting out the assets may be a big litigation player to recover losses.
Here is one of Kevin’s latest posts:
Several months ago, I noted that the evolving litigation wave had long ago ceased to be just about the subprime meltdown. As lawsuits emerge from what I described above as the second derivative of the subprime meltdown, where companies lacking any direct exposure to subprime nevertheless experience losses because of exposure to other companies suffering credit crisis-related reversals, the ensuing litigation wave could threaten to become a generalized inundation deluging a substantial number of participants in the larger economy.
The ultimate wildcard is the impact that the current comprehesive Treasury bailout will have on litigation going forward. The analytic model for the current bailout plan is the formation of a government salvage operator along the lines of the Resolution Trust Corporation (RTC) during the Savings & Loan crisis. Those of us who were around then will recall that the RTC was an active litigant aggressively using litigation to try to recover taxpayer losses. Law.com has a September 22, 2008 article entitled “U.S. Could Emerge as Major Player in Suits Stemming From Financial Crisis” (here) that speculates on that the new government bailout agency could once again play an active litigation role.
Bring your questions for this discerning observer of the litigation impact of the financial crisis to the webcast.
Filed under Featured Events, Webcasts / Podcasts.