The Golden Share: An Analysis of the Latest Failure to Create Bankruptcy-Proof Entities

September 30, 2017

This article provides a brief overview of the use of bankruptcy-remote, special purpose entities, particularly Delaware limited liability companies, in structured finance transactions, and focuses on the doctrine of federal preemption as a basis for courts' steadfast refusal to enforce contractual provisions that would in effect waive the availability of bankruptcy protections. It also evaluates the potential impact recent case law may have on structured finance transactions, and discusses some practical considerations for structuring bankruptcy-remote, special purpose entities.