Bankruptcy Remoteness
/ˈbæŋkrəptsi rɪˈmoʊtnəs/
Definitions
- (n.) The structural legal arrangement of an entity or transaction to isolate assets from the bankruptcy risks of related parties.
The special purpose vehicle was established with bankruptcy remoteness to protect investors' funds.
Forms
- bankruptcy remoteness
Related terms
See also
Commentary
Bankruptcy remoteness is crucial in structured finance and securitizations to ensure that the entity holding the assets is shielded from the parent or originator's insolvency, preserving the value for creditors or investors.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.