Brian Cox and Gary Roth were quoted in the March 7 SNLFinancial article titled, “New Alston & Bird group focuses on credit crunch.” The article discusses the group that consists of 50 partners who will specialize in financial litigation, securitization, class actions, finance, insurance coverage disputes, real estate, bankruptcy, workouts, structured products, retirement plans, banking regulation and derivatives.
Cox described the reason for the new group, saying, “Our clients have the need for more coordinated and focused response from their attorneys…And that’s the primary driver of the formation of this group, the sharing of relevant information regarding the credit crunch across our practice groups here at the firm.”
Roth explained, “You’ve got the borrowers, the homeowners, and the situation they find themselves in, facing untenable loans,” and added, “Linked to that you have the lawsuits that are already showing up from the municipalities and the governmental agencies that have to deal with the consequences of the high foreclosure and abandonment rate that’s occurring because of this kind of lending.”
Roth also said that the mortgage lending business will most likely see new regulation and restrictions on their product offerings, “It’s sort of an obvious reaction and I think it’s safe to say that that will happen. At the larger scale level — at the capital markets levels and so on — I think it becomes very, very complex, and I think change will come slower.”
Roth described the types of litigation that could ensue; he said that “A potential split by a monoline insurer would bring litigation from investors who found themselves holding instruments wrapped by a much weaker entity. Other litigation might stem from dissatisfaction with the rating agencies or perhaps regulators filing suit against market participants.”