Limited recourse: Difference between revisions
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==[[Investment fund]]s== | ==[[Investment fund]]s== | ||
Where you are facing an [[investment fund]] held by equity investors it is slightly — but not very — different. Generally, there is no [[Security interest|security]], since there’s no question of [[ring-fencing]] separate pools of assets. (But [[investment manager]]s can get in the way and steal options, so be on your guard — see below). | Where you are facing an [[investment fund]] held by equity investors it is slightly — but not very — different. Generally, there is no [[Security interest|security]], since there’s no question of [[ring-fencing]] separate pools of assets. (But [[investment manager]]s can get in the way and steal options, so be on your guard — see below). | ||
'''Limiting recourse to the fund’s entire pool of assets''': A provision which says “once all the fund’s assets are gone, you can’t put it into bankruptcy”, | '''Limiting recourse to the fund’s entire pool of assets''': A provision which says “once all the fund’s assets are gone, you can’t put it into bankruptcy”, is essentially harmless, seeing as once all the fund’s assets are gone there’s no ''point'' putting it into [[bankruptcy]]. This is the same place you would be with a single-issue [[repackaging]] vehicle: the [[corporate veil]] does the work anyway. This provision just keeps the directors of the fund in paid employment. | ||
==Limiting recourse to a pool managed by an [[agent]]== | ==Limiting recourse to a pool managed by an [[agent]]== | ||
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*[[Bankruptcy remoteness]] | *[[Bankruptcy remoteness]] | ||
*[[Special purpose vehicle]] | *[[Special purpose vehicle]] | ||
{{ref}} | {{ref}} | ||
{{Technical Tuesday|October 20}} | {{Technical Tuesday|October 20}} |