In the early fall of 2008, a crisis of confidence in the global credit markets made banks reluctant to lend money to anyone, including other banks. This and a number of bank and insurance company failures lead to unprecedented governmental intervention in the global economy. For example, after an accelerated, but failed search to find a buyer, Lehman Brothers declared bankruptcy on September 14. Bank of America agreed to purchase Merrill Lynch at a price that was, just a few weeks earlier, thought to be unimaginable. AIG received an $85 billion capital injection from the U.S. Treasury. By Friday, September 17, more public companies had filed for bankruptcy in the United States than in all of 2007. (See "2007 Public Company Bankruptcies Surpassed, According to BankruptcyData.com," MarketWatch, September 17, 2008.)
In my practice, as these stressful events unfolded, I was asked on numerous occasions to review and re-review existing agreements clients had in place with key customers, vendors, and credit providers in order to give my clients comfort that they were as prepared as reasonably possible for unpredictable events. I was hardly the only lawyer to be inundated by client phone calls asking for assistance in tailoring existing business relationships to the new realities of the global economy. As I discussed these challenges with my colleagues at the bar, several consistent themes emerged in conversation after conversation. This was the genesis of the subsequent articles in the mini-theme for this month's edition of the Business Law Today. These articles have been written by experienced and thoughtful practitioners who were on the front-lines of applying abstract law and contract language to a very real, yet rapidly changing economic and legal landscape. In short, these are practical concepts borne of hard-won experience and are certainly worth sharing.