Do I Need to get My Own Lawyer?


There are times when directors and officers of a troubled financial institution facing an enforcement order should consider hiring counsel, separate and apart from bank counsel, to best protect their personal interest.

Serving as a director or an officer of a financial institution in these troubled times is enough to cause anxiety even for those affiliatedwith a healthy institution. If you are an officer or a director of a troubled institution, such as a bank subject to an enforcement order from federal or state regulatory authorities, the danger zone may be too close for comfort. While it may not reduce your anxiety level, unfortunately you are not alone. The number of enforcement actions has continued to escalate. Since 2008, 261 banks have been closed, with 140 of those closures in 2009. Through August 2010, 96 banks have been closed. Current trends indicate that an even higher number of banks will close in 2010, surpassing the financial crisis of some 20 years ago.

Therefore, you may well be asking when and under what circumstances you should consider retaining your own counsel separate from the bank’s regular outside counsel. Is it worth the expense? What value can separate counsel provide in this context? There are a number of steps that separate counsel can undertake to help you prepare for a receivership and any potential claims that may follow in the wake of a failure.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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