Banco Popular, a Spanish bank, made worldwide headlines following its forced overnight sale to Banco Santander for €1. The sale, which was executed after a decision by the E.U. Single Resolution Board, was widely greeted as a successful application of the new E.U.-wide resolution scheme, with little sign of contagion within the market. The shareholders that had the value of their shares wiped out, along with the holders of €2 billion worth of bonds, are likely to have a different perspective, however. In a guest article, Cadwalader partner Steven Baker and associate Jenna Rennie review the E.U. resolution framework for banks and its application to Banco Popular; examine the viability of legal challenges by investors whose investments were wiped out by the resolution; and discuss how hedge funds can apply lessons from Banco Popular’s collapse to future investing in the European banking sector. For additional insights from Cadwalader attorneys, see “Best Practices for Hedge Fund Managers to Adopt in Anticipation of Enactment of FinCEN AML Rule Proposal” (Aug. 4, 2016); and “Practical Guidance for Hedge Fund Managers on Preparing for and Handling NFA Audits” (Oct. 17, 2014).