Richards Layton & Finger

Claims Trading of Notes of a Debtor Might Become More Difficult After Woodbridge

November 1, 2019

When a debtor files for Chapter 11 or Chapter 7 bankruptcy, often a creditor’s only remedy is to wait for a sale or reorganization, the claims resolution process and other actions to be taken before the debtor or trustee can make distribution on the claim. Unsecured noteholders often do not want to wait for the resolution of a bankruptcy case to be paid. Sometimes, they are willing to take a discount on the amount of their claim in order to receive payment now. The emergence of the claims trading industry has provided that liquidity option.

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