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- Title
SECURITIZED LENDING, SPECIAL PURPOSE VEHICLES, AND SUBSTANTIVE CONSOLIDATION.
- Authors
Farber, Matthew B.
- Abstract
The article focuses on the U.S. Court of Appeals for the Seventh Circuit's decision in Paloian v. LaSalle Bank, NA, wherein a forewarning was offered by the Court regarding the requisite separation of special purpose entities (SPEs), a bankruptcy remote vehicle, from their parent companies. The Court held that lower courts erred in their solvency analysis of the Doctors Hospital of Hyde Park in Chicago, Illinois. It discusses implications of substantive consolidation, an equitable doctrine adopted by the Court within its true sales analysis, on the asset securitization landscape. It suggests that legal practitioners and financial institutions should adjust their practices for preserving the benefits of SPEs. It depicts that bankruptcy remote entity is a single-purpose entity.
- Subjects
UNITED States. Court of Appeals (7th Circuit); LASALLE Bank NA; SPECIAL purpose entities (Corporations); SUBSTANTIVE consolidation (Bankruptcy law); BANKRUPTCY; PARENT companies; ASSET backed financing; JUDICIAL error; LAWYERS; FINANCIAL institutions
- Publication
Lincoln Law Review, 2012, Vol 39, p41
- ISSN
0024-368X
- Publication type
Article