Bankruptcy Claims Trading Orders: Who Is Watching?

Law360, New York (August 29, 2011, 2:10 PM EDT) -- Currently, negotiation and documentation of claims trades remain largely unregulated, with only limited oversight from bankruptcy courts and the U.S. Securities and Exchange Commission. Generally, the bankruptcy court’s, or the claims agent’s, involvement in claims trading is ministerial, i.e., maintaining the claims register and recording transfers if the form complies with the rule. Only if there is an objection to a claims transfer does the bankruptcy court become involved in the substance of a transfer. Bankruptcy courts do, however, have the ability to control the actual...
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