In a seminar at New York University School of Law on Thursday night,
Lipton was part of a panel that included retired Goldman Sachs Chairman Stephen Friedman (currently the chairman of the Federal Reserve Bank of New York) and Joseph Rice III, the founder and chairman of New York-based private equity firm Clayton Dubilier & Rice. The three spoke about the current global economic crisis and offered predictions on what the future might hold for both lawyers and businesses.
Reuters reports that when discussing the downturn in the mortgage and housing markets, Lipton said that assets held by banks would not stop declining until those markets are stabilized. “I don’t think that’s a matter that can be dealt with in a short period of time,” Lipton said. “I’m afraid it will take three to five years before we can achieve that.”
According to Reuters, Lipton went on to say that the economic downturn will result in a flurry of civil suits being filed against directors and officers, which, in turn, will be a driver for significant changes in corporate governance.
The New York Times’ DealBook reports that Lipton also spoke of a shakeout in the financial institution world, whereby large banks control most of the capital necessary to fund deals, with smaller boutiques taking lesser roles.
And “[t]here will always be M&A,” DealBook quotes Lipton as saying. “M&A is very psychological, and CEO’s don’t like to go to their boards in this type of economy.”