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Claims Trading Restrictions Dealt Setback

In recent years, debtors in large corporate bankruptcies have sometimes sought and obtained, in varying degrees, authority at the outset of bankruptcy cases for severe restrictions on trading in claims against the debtors by substantial claimholders. In practice, however, these debt-trading orders have chilled the market for trading in debt securities and served to entrench existing management by effectively precluding substantial investors from acquiring meaningful positions in the debtor's debt securities.

13 minute read December 22, 2006 at 08:41 AM

By

Todd A. Feinsmith And John C. Elstad

Claims Trading Restrictions Dealt Setback

In recent years, debtors in large corporate bankruptcies have sometimes sought and obtained, in varying degrees, authority at the outset of bankruptcy cases for severe restrictions on trading in claims against the debtors by substantial claimholders.

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