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The Dodd-Frank Wall Street Reform and Consumer Protection Act requires that bank holding companies with total consolidated assets of $50 billion or more and nonbank financial companies designated by the Financial Stability Oversight Council for supervision by the Federal Reserve submit resolution plans annually to the FDIC and the Federal Reserve. Each plan must describe the company’s strategy for rapid and orderly resolution under the Bankruptcy Code in the event of material financial distress or failure of the company. The FDIC and Federal Reserve must review each resolution plan and jointly may determine that a resolution plan is not credible or would not facilitate an orderly resolution of the company in bankruptcy.


Companies subject to the rule are required to file their initial resolution plans in three groups and on a staggered schedule. Firms in the first group, which includes U.S. bank holding companies with $250 billion or more in total nonbank assets and foreign-based bank holding companies with $250 billion or more in total U.S. nonbank assets, must submit their initial resolution plans on or before July 2, 2012. 


By regulation, the plans must be divided into a public section and a confidential section. The public section of the plans are meant to contain detailed information to allow the public to understand the business of the covered company. Information in the public portion includes details such as a description of the company’s core business lines and financial information regarding assets, liabilities, capital, and major funding sources.


The public portion of plans submitted on July 2, 2012, can be viewed here.


For instance, the public portion of Goldman Sach’s plan states as follows:  “Based on the specific assumptions provided by our Supervisors, for this baseline scenario, we believe that our Resolution Plan, in conjunction with the Firm’s well-established risk management practices, conservative liquidity management practices and rigorous approach to determining the fair value of our assets, provides a process to enable a GS Group resolution. This conclusion is also based upon:

  • Our strong financial position at December 31, 2011 with a Tier I capital ratio of 13.8% and significant excess liquidity of $171.6 billion
  • Our assessment of the type of bankruptcy proceedings that would be commenced
  • The alternative resolution strategies we have identified, including the sale of businesses and assets of our Material Entities individually or as a package or by the liquidation of the assets of GS Group”

Check frequently for updated information on the JOBS Act, the Dodd-Frank Act and other important securities law matters.

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