Can the Claims of Individual Creditors Be Assigned to a Litigation Trust?

This article explores the history, the more recent case law and the open issues, which could be important in structuring a plan in future cases, of securities claims that belong to the bondholders individually, not to the company.

25 minute read December 15, 2008 at 10:36 AM
By
Russell C. Silberglied And Cory D. Kandestin
Can the Claims of Individual Creditors Be Assigned to a Litigation Trust?

Consider this familiar fact pattern: A small group of bondholders believe that they were misled by a debtor's management about the company's financial situation shortly before the company filed for bankruptcy, and no class action has yet been filed for securities fraud or related claims.

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