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True sale: Difference between revisions
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This is to ensure that in the vendor’s [[insolvency]] there is no chance of the vendor’s [[liquidator]] challenging the transfer of the asset to the purchasing party on the grounds that it was not a true sale for accounting purposes, and [[recharacterising]] it as a loan or an unperfected pledge or other form of [[security]] which may be treated less favourably in the distribution of insolvency proceeds. | This is to ensure that in the vendor’s [[insolvency]] there is no chance of the vendor’s [[liquidator]] challenging the transfer of the asset to the purchasing party on the grounds that it was not a true sale for accounting purposes, and [[recharacterising]] it as a loan or an unperfected pledge or other form of [[security]] which may be treated less favourably in the distribution of insolvency proceeds. | ||
A [[true sale opinion]] is a [[legal opinion]] from a [[law firm]] (ideally a [[magic circle]] one) confirming that a disposal or | A [[true sale opinion]] is a [[legal opinion]] from a [[law firm]] (ideally a [[magic circle law firm|magic circle]] one) confirming that a disposal or [[title transfer]] of collateral amounts to a [[true sale]]. This may segue into a tedious discussion about the technical legal meaning of the word “[[equivalent]]”. | ||
{{seealso}} | {{seealso}} | ||