06 Sep 2022
Closing the Door on Bankruptcy with Bankruptcy Remote Entities
Your bank client is ready and willing to lend funds as part of a commercial real estate transaction. However, the lender wants to protect against the risk that the borrower subsequently files for bankruptcy and is substantively consolidated with the borrower’s affiliates. You suggest using a bankruptcy remote entity.
Related Content
- Bankruptcy Remoteness in Securitization
See this practice note for a discussion of structuring an entity as a bankruptcy remote entity in securitization transactions.
- LLCs and Bankruptcies
Review this practice note for a discussion of LLC and member bankruptcies, structuring LLCs as bankruptcy remote entities, and drafting the operating agreement to address bankruptcy issues.
- Bankruptcy Court Joins the Debate on the Validity of Bankruptcy Blocking Restrictions
Read this article on the disagreement among courts over whether blocking provisions in a borrower's organizational documents are enforceable.
- Non-Consolidation Opinion
Use this template when drafting an opinion that the borrower's assets and liabilities would not be substantively consolidated with those of related entities where the borrower will be established as a special purpose entity.
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