Segregated portfolio company
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Legal Entities of the World™
A spotter’s guide to corporate wildlife
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A form of espievie — seen in the wild in the Cayman Islands, jersey and places like that — where limited recourse is achieved by operation of the company’s constitutive documents, which segregates the company’s innards into segregated cells, assets in each of which are fully protected from claimants pertaining to other cells. While their host espievie is its own legal person able to live, love and enter meaningful contractual relations, the individual cells in themselves do not.
The cells are recognised under domestic law — important on an insolvency — as being isolated from claims of counterparties who have contracted specifically with other cells. It is a way of achieving segregation and bankruptcy remoteness using statute, rather than contract, trust and equity.
Contrast with incorporated cell company, where the cells do have separate legal personality, and with normal old SPVs, where you can achieve more or less the same thing contractually with a combination of limited recourse and security.