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Spring 2018

Bank Directors and the Wells Fargo Order

For those who follow such things, the press release, consent cease and desist order and official letters of reprimand published by the Federal Reserve Board on February 2, 2018, with respect to Wells Fargo & Company (Wells) and named directors (combined, the Wells Order) were highly unusual, and raise issues that should cause all bank directors significant pause.  Read more.

Conducting Harassment Investigations with Outside Counsel

Sexual harassment is illegal. It has been illegal for a long time — over 40 years, in fact. It is, in other words, not new. What is new, however, is the sheer volume of harassment allegations now being made in all corners of the country and at all types of public and private workplaces. The #MeToo movement has encouraged thousands of women to share their stories of harassment and sexual assault, and to follow up with legal actions against wrongdoers. Earlier this year, “Time’s Up,” a legal defense fund for victims of sexual harassment in both the entertainment business and other industries, emerged as another highly visible support system for asserting harassment claims.  Read more.

Acquisitions of Banks by Credit Unions

While once virtually “unthinkable,” banks are now targeted for acquisition by credit unions with more and more frequency. Large credit unions have been active bidders in recent transactions, with a number of acquisitions pending or approved. The stretching of the “common bond” concept has enabled credit unions to take a more bold posture in pursuing bank acquisitions, and the general expansion of the credit union concept has emboldened credit unions to enter the bank M&A market.  Read more.

Lender Risk Calculus Changes in Financing Leveraged Transactions

Leveraged transactions, such as leveraged buyouts (LBO) and leveraged recapitalizations, carry the risk of being unwound in a later bankruptcy of the party that transferred assets (including granting liens) or incurred obligations in the transaction.  The risk that such transactions may be upset in bankruptcy extends, of course, to selling shareholders in an LBO and to shareholders who receive purchase price funds or dividends in a leveraged recap.  These parties may be forced to disgorge some or all of the funds received if the trustee or other suing party prevails in an action to “avoid” (or set aside) the transaction as a fraudulent conveyance (which may or may not involve actual fraud).  The risk to lenders who financed the transaction lies in the potential that their liens and claims against the debtor may also be avoided, and that fees and loan repayments received may be clawed back.  Read more.

About the Vorys Banking Group

With nearly 20 lawyers dedicated to our banking practice, we have hundreds of years of combined practical, hands-on experience in the banking industry. We have been named a "Top Lead Legal Advisor" by American Banker magazine and a Go-To Law Firm® in banking and finance, securities and corporate transactions by Fortune 500 general counsel.

Our group has extensive experience with all aspects of bank corporate and regulatory legal matters, and our attorneys are in constant contact with senior representatives of state and federal banking agencies concerning a diverse variety of significant client matters. We have been intimately involved in the comprehensive rewrite of Ohio banking laws, currently underway with the Ohio Division of Financial Institutions. In fact, since the inception of this project, one of our lawyers, along with representatives from the Ohio Division of Financial Institutions and the Ohio Bankers League, has been a member of the four-person team tasked with handling the rewrite.

We represent public and non-public institutions, from community banks and thrifts to large, multinational financial institutions throughout the United States including clients in Ohio, Washington, D.C., Pennsylvania, Maryland, Virginia, Arizona, Florida, Indiana, Michigan, Kentucky, Missouri, New York, North Carolina, South Carolina and West Virginia.

We assist our clients with bank, thrift, holding company and non-bank affiliate formations; securities law matters; board governance and education; regulatory enforcement actions involving state and federal agencies; mergers, acquisitions and divestitures; branch acquisitions and divestitures; regulatory compliance; capitalization, recapitalization and private equity as well as debt transactions; litigation; employment law matters; executive compensation and benefit plans; tax matters; and the negotiation of all types of contracts. We also represent financial institutions and other institutional lenders, as well as borrowers, in all types of complex commercial and real estate financings, bankruptcies and restructurings.

If you have an idea for an article you would like us to pursue, please contact your Vorys attorney. We hope you enjoy the read.

To learn more, visit vorysfinancialservices.com



David M. Aldous

Aaron S. Berke

Elizabeth Turrell Farrar

Jackie Ford

Jason L. Hodges

Jeffrey A. Marks

Michael D. Martz

Kimberly J. Schaefer

Shane D. Sclichter

Jeffery E. Smith

J. Bret Treier

Anthony D. Weis

Frank C. Zonars



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This alert is for general information purposes and should not be regarded as legal advice. As always, please let us know if you want more information or have questions about how these developments apply to your situation.