Chapter 1 The Purpose of A Practitioner's Guide

• Jurisdiction: United States

Chapter 1 The Purpose of A Practitioner's Guide

The use of special trusts to handle significant large-scale litigation matters and to liquidate other assets for the purpose of accumulating recoveries and distributing them across multiple claimants has been a successful and frequently used strategy for resolving complex corporate bankruptcy issues. The original concepts and structural design of these special trusts date to the asbestos and Dalkon Shield litigation cases in the 1980s. In more recent years, changes in the U.S. Bankruptcy Code have required more rapid resolution of all bankruptcy matters. Today's economic environment favors the separation of operating assets from litigation assets. This approach is seen as a more efficient means of liquidating and allocating the debtor's value among stakeholders, while still permitting the reorganized debtor to emerge from bankruptcy.

The lengthy process of administering assets that have uncertain recoveries, or that...