The Board of Directors of the Federal Deposit Insurance Corporation, or FDIC, voted on Friday, October 8, 2010, to approve a proposed rule clarifying how the agency would treat certain creditor claims under the new orderly liquidation authority established under the Dodd-Frank Wall Street Reform and Consumer Protection Act.

The Board of Directors of the Federal Deposit Insurance Corporation, or FDIC, approved an interim final rule clarifying how the agency will treat certain creditor claims under the new orderly liquidation authority established under the Dodd-Frank Wall Street Reform and Consumer Protection Act.

A case against a hedge fund, and one of its partners and in-house counsel, related to actions at a portfolio company and alleging breach of fiduciary duties survived a motion to dismiss.  The portfolio company, alleged to be insolvent, was a credit derivative product company that had a subsidiary that wrote credit default swaps.

GAO has issued a report which noted the FDIC and Federal Reserve have developed separate but similar review processes for determining whether a resolution plan, often referred to as a “living will,” is “not credible” or would not facilitate a company’s orderly resolution under the Bankruptcy Code.

The Federal Reserve Board approved a final rule specifying its procedures for emergency lendingunder Section 13(3) of the Federal Reserve Act.  Since the passage of the Dodd-Frank Act in 2010, the Board’s authority to engage in emergency lending has been limited to programs and facilities with “broad-based eligibility” that have been established with the approval

The FDIC has adopted final rules which provide that the FDIC, as receiver of a covered financial company, may recover from senior executives and directors who were substantially responsible for the failed condition of the company any compensation they received during the two-year period preceding the date on which the FDIC was appointed as receiver, or for an unlimited period in the case of fraud.