Bankruptcy-remote transactions and bankruptcy law : a comparative approach (part 1) : changing the focus on vehicle shielding Articles uri icon

publication date

  • March 2015

start page

  • 239

end page

  • 274


  • 2


  • 10

International Standard Serial Number (ISSN)

  • 1750-7219

Electronic International Standard Serial Number (EISSN)

  • 1750-7227


  • Bankruptcy-remote transactions are complex, but no longer rare. They are used by parties to insulate a pool of assets from the insolvency of the party that originated them. That party (originator/sponsor) transfers the assets (or the risk associated to them) to a Special Purpose Vehicle, a dummy corporation or trust, and they will be outside the reach of the creditors of the originator/sponsor... at least in theory. This article explores the instances where such vehicle insulation, or 'shielding' can be, or has been tested. Contrary to the theory, it concludes that direct threats, such as veil piercing, substantive consolidation, or re-characterization of the transaction, are not actual threats; yet practice also shows that there are other instances where the vehicle's assets are put temporarily in the hands of the originator in more indirect ways.


  • Law


  • bankruptcy insolvency securitization insulation shielding veil piercing consolidation avoidance characterization