In an article for Turnarounds & Workouts titled “The Rise of Special Situations,” Schulte Roth & Zabel partners and Business Reorganization co-chairs Adam Harris and Doug Mintz discuss the formation of the firm’s dedicated Special Situations Group, a multidisciplinary team focused on helping clients achieve their legal and financial objectives across the spectrum of stressed and distressed transactions.

Read the article.

Schulte Roth & Zabel co-managing partner Marc Elovitz spoke with Bloomberg Law reporter Matthew Bultman for his article, “Wall Street Braces for More SEC Scrutiny of AI, Private Funds.” The piece examined the Securities and Exchange Commission’s race to safeguard its most consequential rules from any future changes in Congress or the administration.   

As part of that work, the SEC has proposed overhauling its “Custody Rule,” which requires investment advisers who store clients’ assets to segregate and safely hold them with “qualified custodians,” such as banks. The agency’s proposal would expand the rule’s requirements to cover a range of assets, including crypto. It would also impose new requirements, including added record-keeping duties. 

Marc commented on the potential wide-ranging impacts of the safeguarding rule, including forcing money managers to reevaluate many of their custodial agreements, he stated, “It ‘will throw a lot of the current custody and deal flow and trade processing into disarray if it is adopted as it was proposed.’” 

Read the article here.  

Schulte Roth & Zabel partners Ele Klein and Adriana Schwartz discussed the recent SEC rules addressing derivatives and group formation with Hedge Fund Law Report‘s Vincent Pitaro for his article titled, “Shorter Filing Deadlines for Schedules 13D and 13G and Other Beneficial Ownership Rule Changes.” The industry interpreted the SEC proposals on “group” formation to lower the standard for forming a group in an unworkable manner, Klein explained. “Thankfully, the SEC made clear that was not their intention, and it instead offered guidance on group formation, which, for the most part, was consistent with past guidance and case law.” He added, “The changes effected by the Rules are mainly limited to shortening the deadlines for Schedule 13D and 13G filings.”  

Adriana stated that “[a]ll managers – but particularly activists – will need to adjust their timelines to be ready to make their positions public sooner and make decisions as to whether the desired position can be obtained in the time allotted, so the campaign will be viable from an economic perspective.” She continued, “Those managers will be making initial filings and amendments sooner and more frequently, adding to an ever growing list of compliance items and filing requirements on their plate.”