|
UNDER THE "TARP"
THE TROUBLED ASSET RELIEF
PROGRAM --
Things to Consider
The Federal government is offering
several forms of assistance to U.S banks
and savings associations of all shapes and sizes.
What does
this mean for you?
Capital Purchase
Program: Opportunities for Balance Sheet Restructuring
The U.S. Treasury Department is
instituting a voluntary Capital Purchase Program ("CPP")
whereby Treasury will purchase on standardized terms up to $250
billion of senior preferred stock from qualifying U.S. financial
institutions. The program is generally available to qualifying
U.S. controlled banks, savings associations, and bank and
savings and loan holding companies which are engaged solely or
predominately in activities that are permitted for financial holding
companies under relevant law.
Applications for the CPP must be
submitted before 5:00 pm (EST) on November 14, 2008. To date,
Treasury has issued a public term sheet, a CPP application and application
guidelines and process related FAQs. A
detailed investment agreement and associated documentation will be
posted on the Treasury website in the
near future. Although non-public financial institutions appear
to be eligible for the CPP, the public term sheet does not
provide the terms applicable to investments under the CPP in
non-public institutions. Guidelines for non-public institutions
may be issued by Treasury in the coming days.
Click Here to read the
complete Clark Hill Article including:
·
Program Highlights
·
The Application Process
· The FDIC's Temporary Liquidity
Program
How can Clark Hill help?
The Troubled Asset Relief Program and the other new programs
being promulgated in connection with TARP raise a number of diverse
and complicated legal issues, including corporate, securities, tax,
regulatory and employee benefit questions. The professionals at
Clark Hill stand ready to use our knowledge to help you evaluate
these programs and to assist you going forward should you elect to
participate. This is new, uncharted territory for banks and
financial institutions. Clark Hill has the Compass: We will
provide the necessary experience and expertise to help you benefit
from the opportunities being provided under the TARP.
With respect to the CPP,
Clark Hill will:
· Review your current capital
structure and assist with any necessary shareholder or board
approvals and/or organizational amendments to bring your capital
structure within the parameters of the CPP
· Review your existing contractual
arrangements to look for restrictions on your ability to alter your
capital structure and assist you in obtaining any necessary consents
· Analyze all steps to be taken to
comply with securities laws and assist with all required filings and
registrations
· Review existing benefit plans to
ensure compliance with the executive compensation provisions of the
CPP and assist with any necessary modifications
· Establish a framework to ensure you
are meeting all CPP requirements
In the coming days we will provide
you with insight on the tax and employee benefit issues raised by the
Capital Purchase Program. We will also alert you to any
forthcoming guidelines pertaining to the CPP as it relates to
non-publicly held financial institutions. Clark Hill will
strive to keep you consistently updated and informed about the
Troubled Asset Relief Program and the government's evolving response
to the turmoil in our capital markets.
Please
contact one of the members of Clark Hill's banking and financial team
should you have any questions about TARP or the Capital Purchase
Program - Dan Beattie (202)
772-0920, Dave Centner, (616)
608-1106, Rick Coy (517) 318-3028, Jim Crowley (248)
988-5851, Bill Dunn (313) 965-8510, Gary Green (312) 985-5905,
Mahesh Nayak (248)
988-5868, John Van Fossen (517)
318-3052, Jeff Van Winkle (616)
608-1113, or Jean Weipert (313)
965-8588.
|
