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A Circuit Court Definitively Addresses Claims Trading

This article analyzes the <I>Enron</I> and <I>KB Toys</I> courts' treatment of the public policy issues associated with claims trading, and the implications of the <I>KB Toys</I> holding with respect to Financial Claims trading in the Third and other circuits.

30 minute read July 01, 2014 at 02:04 PM
By
Yitzhak Greenberg
A Circuit Court Definitively Addresses Claims Trading

The United States Court of Appeals for the Third Circuit recently held that “a trade claim that is subject to disallowance under ' 502(d) in the hands of the original claimant is similarly disallowable in the hands of a subsequent transferee.”

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