Law360, New York (May 02, 2011, 2:28 PM ET) -- For years, the Bankruptcy Code’s safe harbor provisions ensured that energy companies would suffer little interruption in exercising setoff and termination rights with regard to a bankrupt counterparty. The energy company might suffer a market-driven financial loss, but the safe harbor provisions allowed it to terminate, liquidate and accelerate its trading agreements with the debtor in a relatively seamless manner.
Similarly, the safe harbor provisions guaranteed that the energy company could exercise its contractual setoff rights (including the ability to setoff amounts owed to it against...
Rough Waters In Bankruptcy Code's Safe Harbors
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