Lehmans Unsecured Creditors Would Not Have Received Greater Returns Under Orderly Resolution Authority According to Latest ABI Quick Poll
Lehmans Unsecured Creditors Would Not Have Received Greater Returns Under Orderly Resolution Authority According to Latest ABI Quick Poll
Contact: John Hartgen
703-894-5935
[email protected]
LEHMAN’S UNSECURED CREDITORS WOULD NOT HAVE RECEIVED GREATER RETURNS UNDER 'ORDERLY RESOLUTION AUTHORITY,” ACCORDING TO LATEST ABI QUICK POLL
July 1, 2011, Alexandria, Va.— Even if 'orderly
resolution authority' had been in place for the Lehman bankruptcy, the
case would not have produced a greater return to unsecured creditors,
according to a majority (51 percent) of respondents to ABI’s
latest Quick Poll. Twenty-eight percent “strongly disagreed”
and 23 percent “disagreed somewhat” that the case would have
produced a greater return to unsecured creditors had “orderly
resolution authority” been in place for the Lehman bankruptcy.
On Sept. 15, 2008, Lehman Brothers filed the largest bankruptcy in U.S.
history with over $600 billion in listed assets. Lehman's filing
resulted from exposure to risky investments in housing-related assets
that cratered during the mortgage crisis. At the time of its filing,
investment banks such as Lehman were not subject to the same regulations
applied to depository institutions to restrict risk-taking activity. The
Dodd-Frank Act was signed into law in 2010 in response to the financial
crisis and to prevent failures of 'too big to fail' institutions.
Title II of the Dodd Frank Act set out the process of 'orderly
liquidation authority' that enables the government to liquidate covered
financial companies, including non-bank and insurance companies.
Thirty-three percent of respondents thought that unsecured creditors
would have received a greater return if “orderly resolution
authority” had been in place for the Lehman bankruptcy. Thirteen
percent did not know or had no opinion on the poll question.
ABI’s Quick Poll is posted on ABI’s home page, www.abiworld.org. ABI members and
the public are invited to respond to a question on a timely bankruptcy
or insolvency issue. Visit http://www.abiworld.net/quickpoll/
to access the results of previous ABI Quick Polls.
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