After the fall
Cadwalader Wickersham & Taft's annus horribilis began last summer with a phone call from a client in trouble. James Cayne, the chief executive officer (CEO) of Bear Stearns, was on the line for Dennis Block, his longtime outside counsel. Two Bear Stearns hedge funds were heading for bankruptcy, and Cayne wanted Block to help manage the fallout. What neither man knew was that this failure was the first death rattle for Bear Stearns and, even more important, a spark for the subprime mortgage inferno, a financial disaster that would undercut two of Cadwalader's main businesses.In August, Christopher White, who ran Cadwalader's real estate finance practice, was at his home in New York, trying to enjoy a family vacation. But he couldn't get off his phone as one of the biggest deals of his career threatened to unravel. White represented the banks that had financed Blackstone Group's $26bn (£14.7bn) acquisition of Hilton Hotels Corporation. And now, having sized up the capital markets, they wanted out - all nine. The banks ultimately stuck it out under renegotiated terms, but it was still shocking to White. "In 30 years, I have never seen anything like that," he would remark a year later.
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