THE BANK AND CREDIT UNION DISASTERS IN LITHUANIA: WHERE WERE THE LAWYERS?

Abstract

Since Lithuania’s independence in 1991, sixteen banks in the country have gone bankrupt. From 2011 to 2013 two banks—the fifth and sixth largest banks in the country— went bankrupt and three credit unions collapsed. One more credit union collapsed in 2014.
One of the questions not yet posed in the context of this crisis of financial institutions in Lithuania is the question: “Where were the lawyers?” This article focuses on a comparative analysis of the regulation and practice of the legal profession in considering whether and how outside and inside bank and corporate lawyers can be effective gatekeepers, foreseeing, preventing, and mitigating such collapses. This comparative research concludes with propositions for changing legal profession regulations as well as lawyers’ and corporate officers’ education.