Case Study: Credit Agricole V. American Home

Law360, New York (March 9, 2011, 11:35 AM EST) -- On Feb. 16, 2011, the U.S. Court of Appeals for the Third Circuit issued a decision that could radically alter the expectations of counterparties to repurchase agreements (“repos”).

In Credit Agricole v. American Home Mortgage Holdings Inc., Case No. 09-4295, the Court of Appeals affirmed a decision of the bankruptcy court that held that when the “seller” of assets subject to a repo files bankruptcy, the deficiency claim of the lender can be determined based on expert testimony regarding the “intrinsic value” of the underlying assets...
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