Navigating Triangular Setoff Through Safe Harbors

An in-depth discussion of Safe-Harbored contracts and protected entities.

29 minute read June 01, 2015 at 12:15 PM

Jeff J. Friedman And John J. Ramirez

Navigating Triangular Setoff Through Safe Harbors

Section 553(a) of the Bankruptcy Code preserves a creditor's prepetition right to setoff. Courts have strictly construed Section 553(a) to limit the preservation of setoff rights to claims and debts that arose prior to the commencement of the debtor's bankruptcy case.

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