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Claims Trading in a Cross-Border World

Purchasing claims has become more and more prevalent with creditors receiving almost daily offers from various investor parties. The concentration of claims can lead to control blocks as claims traders have different interest than trade creditors, more akin to debenture or bond holders. Starting with the concentration of claims in Eatons way back completely changed the reorganization and arguably resulted in the ultimate failure of the company. How does claims trading work in the more uncertain climate of retail bankruptcies where the reorganization or liquidation of the company is not known for several months? Claims trading is also an issue in the Woodbridge bankruptcy case in Delaware regarding whether the debtor can be compelled to consent to a transfer of a purchased claim.

2018 Cross-Border Insolvency Program
Bankruptcy Code: 
Bankruptcy Rules: 
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