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Toxic Assets Task Force

In light of the current world-wide financial crisis, various government initiatives are underway to assist the nation’s largest financial houses. However, many organizations most affected by the financial environment are not included in the so-called “bail out” plan. Will they be able to receive compensation for effects of toxic assets on their fixed-income portfolios?

The answer, to put it bluntly, is maybe – if the organization hires qualified counsel to advocate on its behalf. Armstrong Teasdale’s Toxic Asset Task Force assists key management personnel in evaluating portfolios to determine whether or not clients holding toxic assets may have claims for compensation. Members work with key personnel to conduct an evaluation of assets and portfolios. The results of the evaluation can often times identify claims that may be asserted to ameliorate the effects of these “financially engineered” poisons.

Armstrong Teasdale partners Paul Kovacs, Dan Nelson and Mark Sophir recently obtained $195,000,000 in settlements from Goldman Sachs ($100,000,000) and Morgan Stanley ($95,000,000). Wall Street’s two biggest players each agreed to these settlements in a lawsuit filed by the firm on behalf of the Liquidator of General American Mutual Holding Company (“GAMHC”).

To obtain these results, the members of the Toxic Asset Task Force have immersed themselves in the financial culture for the past five years, gaining a detailed understanding of the characteristics and nuances of these toxic asset classes. GAMHC’s troubles, and the ensuing litigation, were an early precursor of the current toxic assets problems spreading throughout the economy. A GAMHC subsidiary wrote and sold a particular type of derivative asset, known as a “Floating Rate Funding Agreement,” and backed that asset by investing in now-infamous toxic assets such as Non-Agency Mortgage Backed Securities, Asset Backed Securities, Collateralized Debt Obligations, and Foreign-Asset Backed Derivative Securities.

Two of the Toxic Asset Task Force members are former Federal Prosecutors who will be able to assist with any questions regarding regulatory or criminal investigations or act promptly on behalf of the client should the authorities come knocking.

For more information, contact Mark Sophir.