Bankruptcy petition - 1992 ISDA Provision

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1992 ISDA Master Agreement

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bankruptcy petition in a Nutshell™

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Original text

(4) institutes or 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, in the case of any such proceeding or petition instituted or presented against it, such proceeding or petition
(A) 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
(B) is not dismissed, discharged, stayed or restrained in each case within 30 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: FTPD • Breach • CSD • Misrep • DUST • Cross Default • Bankruptcy • MWA Termination Events: Illegality • FM • Tax Event • TEUM • CEUM • ATE 5 Events of Default: FTPD • Breach • CSD • Misrep • DUST • Cross Default • Bankruptcy • MWA Termination Events: Illegality • Tax Event • TEUM • CEUM • ATE 5 Events of Default: FTPD • Breach • CSD • Misrep • DUSS • Cross Default • Bankruptcy • MWA Termination Events: Illegality • Tax Event • TEUM • CEUM
Early Termination 6 Early Termination: ET right on EOD • ET right on TE • Effect of Designation • Calculations; Payment Date • Payments on ET • Set-off 6 Early Termination: ET right on EOD • ET right on TE • Effect of Designation • Calculations • Payments on ET • Set-off 6 Early Termination: ET right on EOD • ET right on TE • Effect of Designation • Calculations • Payments 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 ᐅ to expand:
ISDA

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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See also

References

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