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| {{isdaanat|3(c)}} | | {{nman|isda|2002|3(c)}} |
| Reference to {{isdaprov|Affiliate}}s can be controversial, particularly for [[hedge fund]] managers.
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| More generally, [[absence of litigation]] it is roundly pointless [[representation]], but seeing as (other than unaffiliated Hedge Fund managers) no-one really complains about it, it is best to just leave well alone. It is one for the {{t|life’s too short}} file.
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| But if you do see your life stretching away unendingly to the horizon, and you haven’t got anything else in the calendar in the next half hour, go west, young man. If you can’t try this:
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| ===[[Absence of litigation]] generally===
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| An [[absence of litigation]] representation seeks to address litigation carrying two particular risks:
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| *'''Enforceability''': Litigation that could somehow undermine or prejudice the enforceability of the agreement you are presently negotiating;
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| *'''Credit deterioration''': Litigation that is so monstrous that it could basically put your counterparty out of business altogether, with amounts still owing to you under the agreement you’re negotiating.
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| ====Enforceability-threatening litigation====
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| Firstly, Earth to Planet ISDA: what kind of {{tag|litigation}} or regulatory action — we presume about something unrelated to this agreement since, by your theory, ''it doesn’t damn well exist yet'' — could adversely impact in the ''enforceability'' of this future private legal {{t|contract}} between one of the litigants and an unrelated, and ignorant, third party? Seach me.
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| If the litigation is so material it will bankrupt the fund altogether then we have way, way bigger problems in our risk management dept, and if we are only catching that through a litigation rep, then we are properly asleep at the switch. And further more if they make this rep, and it’s wrong, how does having the rep help us?
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| Nonetheless, that is one for Credit/Risk. But from my perspective I have never really seen the practical value of this rep (though most clients don’t object to it for that exact reason).
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| {{seealso}}
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| *[[Representation]]
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