Chapter X, B. Enhancing Bankruptcy Remoteness

JurisdictionUnited States

B. Enhancing Bankruptcy Remoteness

To buttress the SPE's bankruptcy remoteness, its organizational structure attempts to limit the risk that the SPE will be substantively consolidated with other entities that are not necessarily bankruptcy remote should any of those entities file for bankruptcy. For example, the SPE's organizational documents typically require it to maintain strict formalities with respect to the transferor of the assets now held by the SPE.348 The SPE will also be required to conduct business in its own name, maintain its own separate books and records and...

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