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.
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.
By
Lawrence V. Gelber And David J. KarpThis premium content is locked for The Bankruptcy Strategist subscribers only
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