Pointers In Bankruptcy Claims Trading

Law360, New York (January 15, 2014, 3:45 PM EST) -- Having decided to acquire claims against a company or person in bankruptcy, there are several important issues that the claims purchaser should consider in negotiating the trade and deciding how the trade should be documented.

In acquiring claims, purchasers generally ask three questions:

What is my expected recovery from the debtor, and what are the risks to that recovery? What are my risks to the notional (or face) amount of the claim that I am purchasing? What are the risks of my counterparty not performing?...
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