On September 7, the U.S. Treasury Department and the Federal Housing Finance Authority (FHFA) placed Fannie Mae and Freddie Mac into conservatorship, and announced (i) Treasury’s entry into a Senior Preferred Stock Purchase Agreement with each Government Sponsored Entity (GSE), (ii) the creation of a Government Sponsored Entity Credit Facility (GSECF), and (iii) the adoption of a GSE Mortgage Backed Securities (MBS) Purchase Program.

On June 26, the UK Financial Services Authority (FSA) announced that it obtained a bankruptcy order against Samuel Nathan Kahn who controlled the affairs of Chesteroak Limited (Chesteroak) and Bingen Investments Limited (Bingen). Chesteroak and Bingen were two UK-based companies that helped illegal offshore boiler rooms sell shares to investors.

With the possibility of a major stock brokerage liquidation appearing more likely than it has been in recent periods, the effect of a liquidation on customers and financial counterparties has become of great interest to many of our clients and others.

Toronto, December 11, 2007 – The number of restructurings in Canada should rise in 2008 due to the serious tightening of the credit market, according to Ogilvy Renault. The tighter market means that when companies have problems and look for money to solve them, they won’t find financing as easily as they have in the past.

On September 25, the UK Financial Services Authority (FSA) announced that two UK-based firms have been placed into liquidation by the UK High Court following the FSA’s intervention. The FSA believes that these scams may have fraudulently persuaded up to 800 people into buying worthless shares. Investors are believed to have lost up to £3.5 million ($7.5 million).

Chesteroak Limited and Bingen Investments Limited were shut down following allegations that they were dealing in or arranging deals in shares without proper authorization.

The District Court sustained claims of breach of fiduciary duty, fraud and deepening insolvency asserted by the successor-in-interest to the Committee of Unsecured Creditors of DVI, a defunct company, against DVI’s former officers and directors.

In proceedings commenced by the Financial Services Authority (FSA), the UK High Court ruled in December 2004 that Adrian Sam & Co (ASC) and John Martin, one of ASC’s two partners, were knowingly involved in the UK activities of an illegal overseas investment firm (a boiler room) and they were ordered to pay £360,000 (approximately $700,000) to 63 investors involved in the boiler room scam. A bankruptcy order was granted against John Martin in August 2006.

In a decision handed down on February 23, the High Court granted a winding-up petition brought by the Financial Services Authority under section 367 of the Financial Services and Markets Act 2000 (FSMA).