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Liquidation Analysis of Financial Institution After the Subprime Market Downturn

Accumyn’s expert assisted in the recovery of amounts due under provisions of a credit facility agreement with a public financial institution engaged in the origination and servicing of residential mortgages in the United States. The financial institution was experiencing difficulties in 2007 due to the market downturn related to subprime mortgages. The financial institution was acquired and made private by a private equity company based in Texas, which specialized in investing in distressed companies. A provision in the credit facility agreement between the lender and the financial institution provided that the debt should have been paid off if the credit rating of the financial institution would have fallen more than one “notch”.     During mediation Accumyn prepared demonstratives of the various liquidation scenarios and identified key documents that revealed how management’s misrepresentations intended to prevent the credit rating downgrade.