Bankruptcy

Repeal the Safe Harbors?

By Stephen Lubben

Today I'm speaking (along with my co-blogger, Adam) at the ABI's conference on chapter 11 reform at Georgetown. I'll be making the case for the repeal of the derivative safe harbors in the Code -- my paper can be found here. I should point out that I suggest that the repeal should be accompanied by corresponding changes to the Code, like allowing "mark to market" collateral provisions to persist despite the automatic stay, giving the debtor the burden of going to court to stop them if they are inappropriate, so my position is not quite as extreme as it might seem at first blush. Rather, my aim is achieve a solution that addresses the legitimate systemic risk concerns without the overreaching of the current safe harbors.

Full post as published by Credit Slips on November 16, 2009 (boomark / email).