The FDIC and FRB made available the public sections of resolution plans submitted by certain large bank holding companies (as required by Title I of the Dodd-Frank Act) to the FDIC and the FRB. The plans are required to describe the reporting company’s strategy for rapid and orderly resolution under the Bankruptcy Code in the event the company is in material financial distress or is failing. The financial institutions that were required to submit their resolution plans by July 2, 2012 (and all of whom met the deadline) were the initial group of nine financial institutions required to submit resolution plans. The initial group included U.S. bank holding companies with $250 billion or more in total nonbank assets and foreign bank holding companies with $250 billion or more in total U.S. nonbank assets. As reported by the financial press, the companies that submitted resolution plans used a broad variety of approaches. Approaches included, among others, proposals to sell units individually, to sell units to hedge funds and to split off banking operations. The FDIC stated that the resolution plans, whose public sections were made available, have not been edited or reviewed by the FDIC and are unchanged from the versions provided by the bank holding companies that provided the plans.
Alert July 10, 2012