Implications of Orderly Liquidation Authority

WSJ Video Interview

August 30, 2010

The Orderly Liquidation Authority established by the Dodd-Frank Act is meant to address two of the Obama Administration’s most important goals for the financial regulatory overhaul: the elimination of taxpayer bailouts and the end of “too big to fail.”  The new law replaces the Bankruptcy Code for liquidating financial companies, granting the Treasury Secretary the authority to appoint the FDIC as receiver of any financial company if certain conditions are satisfied.  It attempts to balance the goals of the bankruptcy and customer protection laws with the goals of preserving or restoring financial stability, public confidence and reasonable risk-taking that may have been disrupted as a result of a financial panic.


Below is a link to a brief Wall Street Journal video interview of Randall D. Guynn, head of Davis Polk’s Financial Institutions Group, in which Mr. Guynn discusses the broad new powers granted to the FDIC to liquidate financial companies, how the authority will be applied, the Act’s efforts to harmonize certain aspects of the Orderly Liquidation Authority with the Bankruptcy Code and the treatment of creditors under the Act.


Click here to access the WSJ video interview.



If you have questions regarding this newsflash, please contact any of the lawyers listed below or your regular Davis Polk contact.

Donald S. Bernstein 212 450 4092
John L. Douglas212 450
Randall D. Guynn212 450
Marshall S. Huebner212 450
Arthur S. Long212 450
Reena Agrawal Sahni212 450
Damian S. Schaible212 450
Erika Diane White212 450
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