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Section 365(o) Coming into Focus

By Daniel A. Lowenthal
December 20, 2010

The Great Recession continues to take a toll on banks. In 2010, 149 banks had failed by mid-November. That's nine more than in 2009 and more than five times the number in 2008. Not since 1992 have so many banks failed in one year. See www.bloomberg.com/news/2010-11-22/adelphia-vitro-lehman-workflow-local-insight-bankruptcy.html.

The situation is not expected to improve soon. The Federal Deposit Insurance Corporation (FDIC) recently reported that 860 banks in the U.S. are “problem” institutions. See www.fdic.gov/news/news/press/2010/pr10256.html. That means that almost one in nine of the nation's 7,760 banks are the highest risk for failure. See www.nytimes.com/2010/11/24/business/24fdic.html?scp=1&sq=Eric%20Dash%20and%20FDIC&st=cse.

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