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Claims Trading

An Introduction to Bankruptcy Claims Trading: Part 2

Documenting a Claims Trade In our previous article, Introduction to Bankruptcy Claims Trading, we discussed the claims trading marketplace, focusing on its characteristics, the motivations for its participants, some basics of documentation, key business and legal structuring considerations, as well as risks borne by sellers and purchasers in these types of transactions.  In this article, […]


Dealing With Distress for Fun & Profit – Installment #15 – Protecting Your Bankruptcy Claim

This series was started (click here to read from the beginning) with a broad overview of business bankruptcy but our last few installments have focused on unsecured creditors (click here to read about unsecured creditors) and the priority scheme in bankruptcy (click here for the 30,000-foot view or you can find more specific treatment here, here and here). In this […]


An Introduction to Bankruptcy Claims Trading

Upon the filing of a bankruptcy petition by a debtor in a U.S. chapter 11 proceeding, any attempts to collect debt by a creditor are halted.  As a result, creditors face the daunting prospects of either waiting out the debtor’s bankruptcy case – not knowing when, how much, or even if they will ultimately recover […]


Update To “Considerations When Selling a Bankruptcy Claim”

A prior article, Considerations When Selling a Bankruptcy Claim, published on this site by the author of this Update presented a scenario wherein a company sold goods or services and received, instead of payment, a notice that its counterparty had filed for chapter 7 or chapter 11 bankruptcy protection. The company sold its “claim” against […]


Investing in Bankruptcy Claims as a Cash Investment

Investing in bankruptcy claims (i.e., claims of creditors against bankruptcy debtors) can be very profitable or can result in a significant, or even total, loss.  Bankruptcy claims are classified in chapter 11 plans of reorganization according to their relative rights against the debtor.  The recovery of a given class of claims will depend on the […]


Considerations When Selling a Bankruptcy Claim

You sold services and received, instead of payment, a notice that your counterparty has filed for chapter 7 or chapter 11 bankruptcy protection. You understand that you have a “claim” against the “debtor,” in bankruptcy parlance. A bankruptcy claims purchaser offers to purchase your bankruptcy claim from you for cash. You accept. You metaphorically light […]


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