Template:M summ 2002 ISDA 5(a)(vii)
ISDA’s is the market standard way of defining “bankruptcy”
The ISDA bankruptcy definition is rarely a source of great controversy (except for the grace period, which gets negotiated only through custom amongst ISDA negotiators because, in its wisdom, ISDA’s crack drafting squad™ thought fit to halve it from 30 days to 15 in the 2002 ISDA.
So you have a sort of pas-de-deux between negotiators where they argue about it for a while before getting tired, being shouted at by their business people, and moving on to something more important to argue about, like Cross Default).[1]
Otherwise, the ISDA bankruptcy clause is a much loved and well-used market standard and you often see it being op-opted into other trading agreements precisely because everyone knows it and no one really argues about it.
- ↑ This, by the way, is an ISDA In-joke. In fact, Cross Default is pretty much pointless, a fact that every ISDA lawyer and credit officer knows, but none will admit on the record.