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Champerty Clarified

In a decision of great significance to secondary market distressed debt and claims purchasers, the New York Court of Appeals recently held that this type of "standard" assignment of claim does not violate New York's champerty statute.

27 minute read April 27, 2010 at 10:33 AM
By
Lawrence V. Gelber and David J. Karp
Champerty Clarified

Participants in the secondary distressed debt and bankruptcy claims markets rely heavily on the notion that assignments of distressed bank debt or claims include the rights to enforce the underlying obligation and to bring litigation against any previous owner(s) (i.e. the upstream seller(s)) of the debt or claims for breach of a representation or warranty that impairs the purchaser's recovery.

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