Davis Polk was featured in a pair of Bloomberg Law articles in connection with its role as one of the industry’s top legal advisers responding to the current banking crisis. The firm is involved in multiple major assignments, including advising UBS on its $3.2 billion acquisition of Credit Suisse and advising 11 of the largest U.S. banks in making $30 billion in uninsured deposits into First Republic Bank.
Davis Polk Chair and Managing Partner Neil Barr told the publication, “Teams from across our entire firm – from restructuring to financial regulation to M&A and finance, and a host of other groups – came together when this all started and have been working non-stop since then to advise clients in real-time as this situation continues to unfold and evolve.”
Partner and Financial Institutions practice head Margaret Tahyar was highlighted for her work advising Signature Bridge Bank on various legal, regulatory and corporate governance matters related to its creation, operation and exit from bridge bank status, as well as Silicon Valley Bridge Bank on a range of issues relating to its status as a bridge bank and ending with the acquisition of substantially all of its deposits and certain assets by First Citizens.
“They want to see lawyers who’ve done it before and they want to see battle scars,” she said of the fact that so many of the lawyers involved in the 2008 financial crisis are taking lead roles in the current situation. “Bridge banks are something that most normal lawyers never think about and we’ve got a whole crew here at Davis Polk who have spent 11 years thinking about bridge banks.”
When asked about Federal Reserve Chairman Powell’s comments that the central bank needs to strengthen supervision and regulation in light of the banking crisis, Margaret agreed and explained, “What I think needs to happen next is a rethinking of how supervision does its work and a paradigm shift of what is transparent and not transparent to the market. The supervisory staff needs more resources and more technology. They are doing heroic work but need better tools.”
Davis Polk partner and Restructuring practice co-head Marshall Huebner, referred to by Bloomberg Law as “a key architect of the 2008 bailouts,” stated, “The current issues are serious and should not be minimized, but, unlike 2008, nobody thinks that the entire western financial system is in immediate and mortal peril.”
As for Marshall’s current role advising SVB’s bondholders, among other mandates, “there have been 18-hour days, one after another,” he said. “There are rather few lawyers who understand and have experience with the tremendous interactive complexity between the bank regulatory system and bankruptcy system.”
Bloomberg Law also notes that Marshall, a new grandfather, took many client calls from his daughter’s hospital room over the weekend that the first news of Silicon Valley Bank broke. “There’s virtually no place that we can’t be found when our clients need us,” he said.
Bloomberg Law also highlighted Davis Polk’s critical role in responding to the 2008 financial crisis. Marshall was recognized for his role as lead counsel to the U.S. Treasury and the Federal Reserve in the rescue of AIG, which Bloomberg Law noted was “the largest government bailout of a private company in U.S. history.” Partner and Financial Institutions practice Chair Randall Guynn, who advised the 11 banks on the First Republic matter, was called out for his role leading all of Citigroup’s major crisis matters.
“Bank Crisis Has Wall Street Legal Vets Reprising Top Roles,” Bloomberg Law (March 27, 2023) (subscription required)
“Davis Polk Leads Silicon Valley Bank Sale to First Citizens,” Bloomberg Law (March 27, 2023) (subscription required)