Legal expertise is required
Protect values, prevent damage: The EAA also needs a high degree of legal expertise to fulfil its mission. The EAA‘s legal department is called upon in relation to many issues, be it contractual law, concerning sales, bank products and capital market topics, or with regard to structured products, derivatives and financing. Specialist legal expertise is also necessary, as the EAA has taken on numerous legal disputes with the portfolio of the former WestLB. It stood as plaintiff or as defendant in existing legal proceedings and took legal steps itself to secure entitlements and dismiss spurious claims.
The EAA above all had to develop competence in the strategic management of large-scale litigation and mass lawsuits. The EAA‘s legal team actively managed external lawyers from 20 different commercial law firms at times. The most sophisticated proceedings were probably the active claims against investment banks in foreign jurisdictions. The EAA and ultimately the guarantors and counter-guarantors of the “Phoenix” portfolio – the State of North Rhine-Westphalia, the local Savings Banks and Giro Associations and the Regional Associations – are subject to a wide range of risks from investments of the former WestLB in structured capital market products. These are, in particular, US mortgages that were securitised and bundled in special purpose vehicles. With the help of its lawyers, the Phoenix special purpose vehicles succeeded in particular in asserting their legal rights against contractual parties in the US. As a result, more than USD 600 million has been pursued to date, which benefits the Phoenix guarantors. The EAA provided support to the Phoenix special purpose vehicles within the scope of its role as creditor. In Germany, the EAA is investing a similar amount of effort in managing the defence in cases of revocation of loan agreements and against interest rate swap claims by North Rhine-Westphalian municipalities.