In re Zais Investment Grade Ltd. VII1 is the latest in a recent line of bankruptcy cases challenging bedrock assumptions regarding securitization special purpose entities (SPEs) and bankruptcy considerations in securitization transactions.2 Zais establishes precedent allowing a senior noteholder of a collateralized debt obligation (CDO) to place the CDO issuer in an involuntary chapter 11 bankruptcy in order to advance an asset management plan that would otherwise require supermajority approval of all noteholders (including all junior classes) under the related indenture.
Filed under:
USA, Insolvency & Restructuring, Litigation, Securitization & Structured Finance, Katten Muchin Rosenman LLP, Bankruptcy, Debtor, Unsecured debt, Collateral (finance), Asset management, Debt, Asset-backed security, Maturity (finance), Liquidation, Bad faith, Cashflow, Default (finance), Collateralized debt obligation, Title 11 of the US Code, United States bankruptcy court
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