Treasury consults law firm on $700bn bailout

by David Masters

Story link: Treasury consults law firm on $700bn bailout

The US treasury is seeking legal advice to help it implement its $700 billion bailout of the US financial system.

New York City-based law firm Simpson, Thacher and Bartlett has been appointed to advice the treasury on legal matters arising from the purchase of distressed assets from banks.

Six law firms were contacted last week by the treasury to offer advice on how the bailout should be structured.

Only two firms responded, and of those Simpson, Thacher and Bartlett was chosen and began working on the project this week.

Simpson has given advice relating to the credit crunch to a number of financial companies including the collapsed Lehman Brothers bank and Washington Mutual, which was taken over by JP Morgan Chase.

The identity of the other five law firms approached by the US government is unknown.

Simpson’s contract with the US government will last six months.