Securitisation glossary by Vinod Kothari
Bankruptcy remote- A key concern in securitisation transactions to ensure that the transfer of assets of the originator to the investors' representative or SPV is not affected by bankruptcy or distress of the originator. This necessitates certain legal precautions in structuring the assignment of receivables, as also so constituting the SPV that it can neither be taken to liquidation by the shareholders of the originator, nor by those of the SPV itself. Further, the structure should also ensure that the SPV would not be treated as the subset of the originator by substantive consolidation. Such a structure is called bankruptcy remote structure.
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