Market Rebound Could Take Five Years
Martin Lipton, one of the leading mergers and acquisitions lawyers in the country, told an audience at a seminar held at New York University School of Law on October 23, 2008, that a full economic recovery could take between three and five years. Mr. Lipton said that until the housing and mortgage situation is stabilized and until the value of banks' assets stops declining, "we will not be out of this problem."
As reported in the Reuter's DealZone Blog and The New York Times Deal Book Blog, Mr. Lipton predicted that the crisis will bring about substantial changes in corporate governance driven by lawsuits against corporate directors. Lipton argued, "the corporate governance world argues against boards capable of doing their job." For example, because of recent rules regarding independent directors and pressure corporate governance advocates, too many directors have too little experience in the industry of the companies they are overseeing.
If Mr. Lipton is arguing that the new rules should be repealed and corporations should go back to staffing their boards through the “Old Boys Network,” he may be preaching to a public that is not receptive to deregulation arguments. If, however, he is in favor of increasing the training and tools available for directors to do their jobs, that message might well be acted upon in today’s climate.
