A cascade of events emanating from the downturn in the housing market and the collapse of the subprime mortgage industry has caused financial and economic consequences that have reverberated throughout the broader financial markets. The impact of these events extends to financial institutions, borrowers, public and private pension plans, ratings agencies, private equity, real estate and hedge funds, investors, insurance companies, and directors and officers of certain of these enterprises.

In recognition of the complex challenges faced by many clients, Duane Morris has formed the Credit Crisis and Subprime Lending Practice that brings together lawyers from the various disciplines best equipped to focus on these issues.

Range of Services

Corporate Compliance, Regulatory, Investigations and Litigation

Investigations are growing in number from the Department of Justice, state Attorneys General, the SEC and numerous other federal, state and local regulatory agencies. Our attorneys have guided clients through investigations by these agencies, as well as conducted internal investigations. We are experienced with the intricacies of parallel proceedings and concurrent domestic and foreign investigations. We also focus on the enforcement and defense of contractual commitments, the pursuit and defense of claims of financial fraud and other misconduct, and criminal inquiries.

Our experience includes conducting investigations on behalf of companies, individuals and government agencies in matters of white-collar criminal defense, alleged corporate misconduct and corporate regulatory compliance. We assisted the Office of Federal Housing Enterprise Oversight (OFHEO) in conducting its extensive and complex Special Examination of Fannie Mae's manipulation of accounting and earnings to trigger bonuses for senior executives. The examination resulted in a comprehensive report of more than 340 pages and an agreement by Fannie Mae to pay $400 million in penalties and enter into a significant plan of remediation. We continue to advise and provide counsel to OFHEO.

Our national Trial practice possesses the experience and depth to represent vigorously clients in lawsuits and potential litigation related to claims arising from the failure of mortgage loans and other financial products. We also defend institutional clients in class actions on behalf of shareholders and other investors in all actions involving complex financial instruments.

Practice members include:

Joseph J. Aronica Joseph J. Aronica

George D. Niespolo George D. Niespolo

Stephen H. Sutro Stephen H. Sutro

Restructuring/Reorganization for Both Creditors and Debtors

Our attorneys bring to the table their experience in managing the crises experienced in the 1980s and 1990s, which saw similar rounds of failures and consolidation in the subprime lending market. We assist clients seeking protection from creditors or pursue restructuring options outside of court for troubled real estate loans, mortgage-backed securities, collateralized debt obligations, financial guarantees and mortgage insurance, as well as other real estate arrangements, structures and acquisitions.

Our group represents clients seeking to recover funds loaned to subprime lenders. We also represent lenders in bankruptcy proceedings.

Practice members include:

Paul D. Moore Paul D. Moore

John R. Weiss John R. Weiss

Real Estate

We represent sellers and purchasers of real estate portfolios. Our lawyers have provided guidance to clients seeking to take over failed projects, including minimizing the risk of successor developer liability. Our lawyers also actively participate in foreclosures, deeds in lieu and receiverships.

Practice members include:

David R. Augustin David R. Augustin

John H.C. Barron, Jr. John H. C. Barron, Jr.

Equity and Debt Funding, Mergers and Acquisitions

Our attorneys have achieved prominence and stature within the global financial community as part of one of the most comprehensive financial services practices in the world. This reputation is derived from our substantial experience nationally and internationally, our comprehensive understanding of the sensitivities affecting financial instruments and the world markets, and the breadth and depth of our multifaceted financial services practice.

Our attorneys represent government and institutional borrowers as well as regional, national and international bond issuers, bond insurers, credit providers, underwriters and an ever-widening range of others exposed to risk from the tightened lending environment. We assist with issues related to tax-exempt and insurance-backed debt, including situations entailing credit rating decreases, increases in debt reset percentages and matters involving the consequences of failed bond auctions and major bond insurer downgrades. Our attorneys respond quickly and decisively to restructuring transactions and provide options for borrowers of auction and variable-rate bonds and insurance backed securities unable to sell their holdings.

We help to identify sources of funding to secure or enhance liquidity or to replace auction-rate securities with alternative short-term debt instruments. In one of the first such deals in the country, our attorneys recently completed a highly complex transaction that successfully replaced a borrower's auction-rate securities with a bank letter of credit used to back bond insurance, resulting in a dramatic drop in the bonds' interest rate and savings to the borrower in the millions of dollars over the life of the bonds.

Our attorneys assist companies in selling businesses, assets and loan portfolios, and provide strategy and counsel to clients seeking to purchase distressed assets. We also work with clients to develop and implement creative strategies to help maximize value and position them as advantageously as possible, whether they are a lawyer, seller, lender or intermediary.

Practice members include:

Sheldon M. Bonovitz Sheldon M. Bonovitz

Martin B. Shulkin Martin B. Shulkin

For Additional Information

For more information, please contact any of the attorneys referenced above or in the Attorney Listing.