Arent Fox's Robert Honigman, a partner in the firm's tax and estate planning practice, recently spoke at a DC Bar Association forum on public-private investment funds and his remarks were reported by BNA's Daily Report for Executives.

New Public-Private Investment Funds Raising Questions for Participants, Practitioners Say   

“Practitioners said Nov. 18 that the government's creation of so-called public-private investment funds as a way to increase liquidity in the struggling markets has raised many questions for participants in the new structures. In essence, the government created two types of programs under the new funds, called 'legacy loans' and 'legacy securities,' and both create issues for the private sector, according to Robert Honigman, Arent Fox LLP, and Linda Carlisle, White & Case LLP.

Speaking at a forum sponsored by the DC Bar Taxation Section's Passthroughs and Real Estate Committee, Honigman said it is his understanding that the government wanted to help banks take 'toxic assets' off the books to free up more capital to move through the markets. 'The original idea was that assets were going to come from healthy banks, that they would be clamoring to participate,' Honigman said. He said healthy banks turned out not to be interested in the program, in part because asset prices were 'still too low.'

Treasury then decided to buy assets from banks in receivership, with the Federal Deposit Insurance Corporation as receiver, an equation that raises a host of issues, Honigman told practitioners. 'Now we have the FDIC wearing different hats on both sides,' he said. There is a question of 'what is Treasury?' and whether or not Treasury and the FDIC are related, Honigman noted.”

To read the full Daily Report for Executives article, please click here.*

*Reproduced with permission from Daily Report for Executives, 221 DER G-7 (Nov. 19, 2009).
Copyright 2009 by The Bureau of National Affairs,Inc. (800-372-1033)

Robert Honigman
honigman.robert@arentfox.com
202.857.6041