New laws don't cancel old deals
Article Abstract:
Winstar Corp v US dealt with the results of a conflict between the government's contractual obligations and a subsequently passed law. Before FIRREA, the government considered supervisory good will to be regulatory capital as an incentive for the acquisition of a failing thrift. After FIRREA, this was no longer the case and Winstar went bankrupt. It sued the government for breach of a contract to recognize good will. The court ruled that passage of FIRREA did not permit the government to breach a contract as this would have been the same as taking private property for public use.
Publication Name: The National Law Journal
Subject: Law
ISSN: 0162-7325
Year: 1992
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Appeal court decision validates shady deals
Article Abstract:
The US Federal Court of Appeals decision in Winstar Corp v. United States on Aug 30, 1995, legitimates the regulatory sleight-of-hand that sustained insolvent thrifts in the 1980s, and could cost taxpayers another $5 billion. Regulators who did not want to shut down failing thrifts encouraged companies to acquire insolvent thrifts and treat the resulting liability as an asset, called 'supervisory good will.' When Congress passed the Financial Institutions Reform, Recovery, and Enforcement Act in 1989, it upset these contracts, so the firms sued and won.
Publication Name: The National Law Journal
Subject: Law
ISSN: 0162-7325
Year: 1995
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High court protects habitats; a recent decision may restrict owners' rights in real property inhabited by endangered species
Article Abstract:
The US Supreme Court's decision June 29 in Babbitt v Sweet Home Chapter of Communities for a Great Oregon limits owners' rights in real property that an endangered species inhabits. The ruling's ultimate impact will depend on how the underlying Endangered Species Act regulation is applied. Overzealous use of the act has already proven counterproductive. However, the ruling could encourage wider use of CA's Natural Community Conservation Plan, or variants, letting owners avoid seeking permits and assuring a safe harbor.
Publication Name: The National Law Journal
Subject: Law
ISSN: 0162-7325
Year: 1995
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