LENDER INSOLVENCY:
Humpty Dumpty had a Great Fall –
The Aftermath

1. Introduction
2. Regulatory Framework for Insolvent Institutions
   1. General
   2. Special Avoidance Powers
   3. FSLIC Receiver as Litigant
3. Impact on Construction Industry
   1. Owner/Developer
   2. Contractors/Sub-Contractors/Materialmen
   3. Other Parties
4. Future Transactions - Preventive Medicine
   1. Need to Research Lender's Solvency (Improved Underwriting)
   2. Drafting Contracts
   3. The Developer/Lender
5. The borrower's broke and the lender's broke! Whose next? The regulators?

Attachment: THE FDIC/FSLIC SUPER POWERS

Abstract

The recent number of failed financial institutions has introduced a new and troubling variable in the construction industry. The impact of these insolvencies, ranging from delays in advancement of funds to the special avoidance powers of the regulators, can have a devastating effect on a construction project and material adverse effects on the numerous interests represented in such project. It is the purpose of this presentation to identify many of these concerns (and concerned interests) and address in brief fashion both how to deal with these circumstances and "preventive medicine" techniques to avoid similar problems in the future.

Full Text

You must have the free Adobe Acrobat Reader 4.0 (or greater) installed in your computer in order to view or print this paper. It is available as a free download from the Adobe Web site. If you do not have Acrobat Reader installed, click the link to the left to download it. If a menu window opens before the paper, choose the "View" option.