The subject is the legislation establishing a fund to carry out the $700 billion “troubled asset relief program.” The question is how Treasury, while stabilizing the marketplace, can also maximize returns to the taxpayers. Treasury will publish, shortly, guidelines for pricing, valuing and purchasing troubled assets. Herewith advice on how Treasury might draft guidelines to protect the government’s capital.
Treasury, obviously, has to step up to the plate to stop the bleeding in the first instance. No private investor could expeditiously assemble $700 billion. That said, significant worldwide private capital is lining up to invest in distressed assets; likely investors include clients of my law firm. To aid in understanding the landscape, let me make suggestions on how Treasury, case-by-case, can structure deals amounting to win/win outcomes for both itself and the buyers.
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