“Bailout Bill Update: Opportunities for Asset Managers”

After a week of political drama and deliberations, draft legislation for the Emergency Economic Stabilization Act of 2008 was debated and failed to pass when put to a House vote on Monday. The stated purpose of the bailout plan is to stabilize American financial markets. The core of the plan, which remains unchanged from the initial proposal submitted by the U.S. Department of Treasury to Congress on Saturday, September 20th, is the establishment of the Troubled Asset Relief Program (TARP) to purchase distressed assets from banks and other financial institutions. Depending on the final form of the legislation when approved by Congress, and the procedures established by the Treasury Department in the next month or so to actually implement the TARP, the program is likely to offer private asset managers significant opportunities for involvement. This Stroock Special Bulletin summarizes those portions of the draft of the 110-page rescue bill released on Sunday evening that are of particular interest to asset managers.