In recent months, defaults, delinquencies and foreclosures related to subprime mortgage loans have reached historic levels. Bonds, securities, structured products and derivatives that are backed by or based on subprime mortgage loans and other related investments have correspondingly experienced problems of valuation and liquidity. These events have created ripple effects throughout the economy, causing a downturn in the global credit markets and a proliferation of legal issues for institutions and transactions having exposure to subprime mortgage loans.
In response to these events, Alston & Bird has assembled the Subprime Mortgage Markets Initiative, a team of more than 40 lawyers experienced in the complex legal issues arising in the many sectors impacted by the current subprime turmoil.
“While we have had the experience necessary to address issues related to the subprime market concerns of clients, we have now pulled these resources together into a team prepared to be responsive to the changing needs of our clients,” comments Richard Hays, managing partner of Alston & Bird. “The team structure allows the attorneys to view the client’s situation from a broad array of perspectives and to find the most immediate solutions to problems.”
Members of the group have extensive experience in addressing the types of issues currently being confronted in the market. Among other areas, they offer expertise in representing financial institutions and corporations in financial litigation, securitization, class actions, real estate, insurance coverage disputes, finance, bankruptcy, workouts, structured products, retirement plans, banking regulation and derivatives.
“Over the past several months, our clients have engaged lawyers from many practice groups within the firm to assist them in a variety of matters tied to problems in the subprime sector,” notes Brian Cox, co-chair of the Initiative and partner in the Global Finance and Debt Products Group in Charlotte. “For example, we have advised lending institutions in pending class actions brought by investors and in other securities fraud class actions. We have also represented national financial institutions in defaults and potential defaults relating to a number of securitization structures and in the bankruptcies of participants in the securitization industry. The formation of this team enables the attorneys of our firm to communicate more effectively about the issues facing our clients and to formulate more comprehensive and proactive responses to their needs.”
Going forward, Alston & Bird expects that its clients will continue to see an escalation in the number of issues resulting from the current crisis in global credit markets, including litigation, increased bankruptcies and restructurings, government investigation, regulatory enforcement and legislative action. The formation of the Subprime Mortgage Markets Initiative allows Alston & Bird to anticipate the best strategies, practices and solutions in an integrated, multidisciplinary fashion as this crisis continues to unfold.