Orderly Liquidation Authority Regulation - White Paper - FDIC:The Orderly Liquidation of Lehman Brothers Holdings under the Dodd-Frank Act - April 18, 2011

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Dodd-Frank Timeline, Interim Final Rule on Orderly Liquidation Provisions, FDIC
Final Rule Issued Effective Date Comment Deadline
January 25, 2011 January 25, 2011 March 28, 2011
Dodd-Frank Timeline, Claims Process under Orderly Liquidation Authority Provisions, FDIC
Proposal Date Comment Deadline Final Rule Issue
March 23, 2011 May 23, 2011 August 15, 2011

April 18, 2011

This report, which appeared in the FDIC Quarterly, Volume 5, No. 2, examines how the bankruptcy and failure of Lehman Brothers Holdings in September, 2008 could have been structured had the Orderly Liquidation Authority Provisions existed at that time. According to the press release, the "report concludes that Title II of the Dodd-Frank Act could have been used to resolve Lehman by effectuating a rapid, orderly and transparent sale of the company’s assets."<ref>The Orderly Liquidation of Lehman Brothers Holdings under the Dodd-Frank Act. FDIC. Retrieved on June 27, 2011.</ref>

The report concludes that, in order to effectuate orderly liquidation in such circumstances, these OLA powers are critical:

  • Advance resolution planning;
  • Domestic and international pre-planning, coordinated with foreign regulators;
  • Source of Liquidity, with creditors and shareholders, and not taxpayers, bearing any loss;
  • Speed of execution; and
  • Flexible transactions under the FDIC's bidding structure.



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