Bankruptcy petition: Difference between revisions

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Revision as of 09:15, 3 October 2024

2002 ISDA Master Agreement

A Jolly Contrarian owner’s manual™

bankruptcy petition in a Nutshell

The JC’s Nutshell summary of this term has moved uptown to the subscription-only ninja tier. For the cost of ½ a weekly 🍺 you can get it here. Sign up at Substack. You can even ask questions! Ask about it here.

Original text

(4)
(A) institutes or has instituted against it, by a regulator, supervisor or any similar official with primary insolvency, rehabilitative or regulatory jurisdiction over it in the jurisdiction of its incorporation or organisation or the jurisdiction of its head or home office, a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors’ rights, or a petition is presented for its winding-up or liquidation by it or such regulator, supervisor or similar official, or
(B) has instituted against it a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors’ rights, or a petition is presented for its winding-up or liquidation, and such proceeding or petition is instituted or presented by a person or entity not described in clause (A) above and either
(I) results in a judgment of insolvency or bankruptcy or the entry of an order for relief or the making of an order for its winding-up or liquidation or
(II) is not dismissed, discharged, stayed or restrained in each case within 15 days of the institution or presentation thereof;
See ISDA Comparison for a comparison between the 1992 ISDA and the 2002 ISDA.
The Varieties of ISDA Experience
Subject 2002 (wikitext) 1992 (wikitext) 1987 (wikitext)
Preamble Pre Pre Pre
Interpretation 1 1 1
Obligns/Payment 2 2 2
Representations 3 3 3
Agreements 4 4 4
EODs & Term Events 5 Events of Default: FTPDBreachCSDMisrepDUSTCross DefaultBankruptcyMWA Termination Events: IllegalityFMTax EventTEUMCEUMATE 5 Events of Default: FTPDBreachCSDMisrepDUSTCross DefaultBankruptcyMWA Termination Events: IllegalityTax EventTEUMCEUMATE 5 Events of Default: FTPDBreachCSDMisrepDUSSCross DefaultBankruptcyMWA Termination Events: IllegalityTax EventTEUMCEUM
Early Termination 6 Early Termination: ET right on EODET right on TEEffect of DesignationCalculations; Payment DatePayments on ETSet-off 6 Early Termination: ET right on EODET right on TEEffect of DesignationCalculationsPayments on ETSet-off 6 Early Termination: ET right on EODET right on TEEffect of DesignationCalculationsPayments on ET
Transfer 7 7 7
Contractual Currency 8 8 8
Miscellaneous 9 9 9
Offices; Multibranch Parties 10 10 10
Expenses 11 11 11
Notices 12 12 12
Governing Law 13 13 13
Definitions 14 14 14
Schedule Schedule Schedule Schedule
Termination Provisions Part 1 Part 1 Part 1
Tax Representations Part 2 Part 2 Part 2
Documents for Delivery Part 3 Part 3 Part 3
Miscellaneous Part 4 Part 4 Part 4
Other Provisions Part 5 Part 5 Part 5

Resources and Navigation

Index: Click to expand:

Comparisons

Redlines


Discussion

Between the 1987 ISDA and the 1992 ISDA, some fussy additions of Specified Entities. A bigger change in the 2002 ISDA, where a proceeding brought by a regulator is instantly an Event of Default, and is not subject to the grace period that applies to creditor petitions.

Basics

The JC’s colloquial expression for a Bankruptcy Event of Default that meets the criteria set out in Section 5(a)(vii)(4) of the ISDA Master Agreement.

Points to note: Section (A), wherein the petition is presented by a regulator of some kind, the event is an Event of Default in itself. Where, per Section (B), the petition ie presented by a random creditor or other public agitant, there is a grace period in which the subject entity may apply to dismiss the petition — 15 days in the 2002 ISDA, 30 days in the 1987 ISDA and 1992 ISDA — so until this grace period has expired (or a bankruptcy judgment is entered) a Section 5(a)(vii)(4)(B) event is only a Potential Event of default.

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  • JC’s “nutshell” summary of the clause
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  • Automatic Early Termination

See also

References