Achieving Bankruptcy Remoteness In Structured Finance The final step to achieving bankruptcy remoteness is the inclusion of bankruptcy remote provisions in the transaction documents Bankruptcy remote provisions mainly come in the form of two provisions: limited recourse and non-petition
Current Status of Bankruptcy Remote Entities - Ice Miller Given that, the selection of the independent manager is critical The SPE’s organizational documents should prohibit the SPE’s parent or sponsor from firing or replacing the independent manager selected by the lender
Separateness Covenants - Richards, Layton Finger These Standard Clauses are a representative set of separateness requirements that a lender may require in a borrower’s organizational documents and loan documents These Standard Clauses contain integrated drafting notes with important explanations and drafting and negotiating tips
Bankruptcy Remote: Bankruptcy Remote Operations: The Safety Net of SPVs Bankruptcy-Remote Provisions: These provisions are embedded in the SPV's organizational documents to minimize the risk of bankruptcy They include limitations on the SPV's ability to incur debt, restrictions on business activities, and covenants to maintain a certain level of solvency
SPVs in structured finance transactions: Cayman Islands This article addresses the establishment of structured finance SPVs in the Cayman Islands, including a discussion on the reasons for choosing the Cayman Islands, the types of corporate structures typically used and applicable international standards and local regulations
Understanding Structured Finance Opinions: True Sale and Non . . . Ensuring the SPE is unlikely to voluntarily file for bankruptcy or be substantively consolidated into the originator's bankruptcy This is done through separateness covenants, narrow purpose provisions, and independent directors in the SPE's organizational documents
Bankruptcy Remote Structures - Recent Nonconsolidation Opinion Concerns . . . The SPE organization documents should include three critical provisions: (1) limitation of purpose to owning, operating, and financing the specific property to be financed; (2) limitation on the debt that may be incurred for the mortgage loan that will be included in the securitization and trade payables not exceeding 2% to 4% of the mortgage
Cayman Islands - Achieving Bankruptcy Remoteness In Structured Finance. They achieve "bankruptcy remoteness" by separating the SPV from other parties, ensuring a true sale of underlying assets, and including specific bankruptcy remote provisions (limited recourse and non-petition) in transaction documents