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| {{fullanat2|isda|5(a)(vii)|2002|5(a)(vii)|1992}} | | {{newisdamanual|5(a)(vii)}} |
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| ===Analysis===
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| ====Speed Read====
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| In essence the {{2002ma}} definition amounts to the following:
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| The Counterparty, any {{isdaprov|Credit Support Provider}} or {{isdaprov|Specified Entity}}:―
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| #'''Dissolved''': is dissolved (other than pursuant to a merger);
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| #'''Insolvent''': becomes insolvent, [[unable to pay its debts]], or admits that in writing;
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| #'''Composition with Creditors''': makes a composition its creditors;
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| #'''Involvency Proceedings''': (A) becomes subject to insolvency (or similar) proceedings instituted by a regulator; or (B) becomes subject to insolvency (or similar) proceedings instituted by anyone ''other than'' a regulator which result in a winding up order or are not discharged within 15 days
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| #'''Voluntary Winding Up''': has a resolution passed for its winding-up (other than pursuant to a merger);
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| #'''Put in Administration''': has an administrator, provisional liquidator, or similar appointed for it or for all or substantially all its assets;
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| #'''Security Exercised''': has a secured party take possession of all or substantially all its assets which process is not dismissed within 15 days ;
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| #'''Analogous events''': Causes or is subject to any event which, under the applicable laws of any jurisdiction, has an analogous effect to any of the above; or
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| #'''Action in furtherance''': takes any action in furtherance of any of the above.
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| ====Change betwee 92 and 02 versions====
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| There are two:
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| *'''Slightly more specific concept of insolvency''': firstly, in limb 4('''insolvency proceedings''') a new limb (A) has been included to cover action taken by an entity-specific regulator or supervisor (as opposed to a common or garden insolvency proceeding)
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| *'''Contracted [[grace period]]''': The allowable period for dismissal of an insolvency petition (under 5(a)(vii)(4)) or the exercise of security over assets (under 5(a)(vii)(7)) is compressed from 30 days to 15 days. This, in aggregate over the whole global market, keeps many a negotiator in meaningful* employment.
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| <sup>*</sup>"meaningful" is in the eye of the beholder, you understand.
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| ====Market standard====
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| The ISDA {{isdaprov|bankruptcy}} definition is rarely a source of great controversy (except for the [[grace period]], as to which see below, which gets negotiated only through custom amongst ISDA negotiators because, in its wisdom, [[ISDA]] thought fit to change it in the {{2002ma}}. So you have a sort of pas-de-deux between negotiators where they argue about it for a while before getting tired, being shouted at by their business people, and moving on to something more important to argue about, like {{isdaprov|Cross Default}}*.)
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| Otherwise the ISDA ''bankruptcy'' clause is a much loved and well used market standard and you often see it being imported into other agreements precisely because everyone knows it and no one really argues about it.
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| <sup>*</sup>This, by the way, is an ISDA In-joke. In face {{isdaprov|Cross Default}} is almost totally pointless.
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| ====[[Grace period]]====
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| Note the contraction of the grace period from 30 days to 15 days between the {{1992ma}} and the {{2002ma}}. Note also, for students of history, the problematic {{isdaprov|Automatic Early Termination}} situation under the {{1987ma}}.
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| ====1987 ISDA====
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| {{isdaquote|{{clause|1987|ISDA|Interest Rate and Currency Exchange Agreement|5(a)(vii)}}|5(a)(vii)|1987}}
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| *{{isdaprov|Automatic Early Termination}}
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