On The Nature Of The Transferred Bankruptcy Claim
Abstract
Creditors can sell their claims against bankrupt companies. Selling a claim allows a creditor to convert into cash a claim that may not be paid for years and is unlikely ever to be paid in full and allows the buyer to speculate on the claim value, in the hopes of paying less for the claim than the payout that will be distributed through the bankruptcy proceedings. While claims trading is a common practice, there has not been a lot of case law on complications that can arise when the beneficial ownership of a claim changes via sale and assignment. The article discusses some cases I worked on, including Enron's and Delphi Automotive, where there was heavy claims trading.
Fields of Study & Subjects
Corporate Insolvency and Governance
Publication details
- Journal / source
- SSRN Electronic Journal
- Publisher
- Elsevier BV
- Volume
- 12
- Issue
- 1
- Pages
- 35
- Publication date
- 1 January 2026
- Language
- EN
- Document type
- Preprint