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 Why mention this in an article about [[voidable preference]]s? Well, as long as you are doing secured, single-issuance deals where every [[creditor]] is represented by the [[security trustee]] and has a place reserved at ''La Restaurant Cascade de Sécurité'', no reason at all.
-But latterly, [[limited recourse]] has slipped its moorings and drifted into the shipping lanes through which ordinary, unsecured asset management vehicles lumber. [[Hedge fund]]s. [[UCITS]]. [[SICAV]]s. An [[investment fund]] [[espievie]] doesn’t usually grant security over its assets at all, and it has a much more dispersed, antagonistic bunch of creditors and, usually, equity holders too.
+But [[limited recourse]] has slipped its moorings and drifted into the shipping lanes and intercontinental canals<ref>I am going to resist the temptation to make an Ever Given Suez Canal gag here. Mainly because I can’t think of one.</ref> through which ordinary, unsecured asset management vehicles make their stately passage. [[Hedge fund]]s. [[UCITS]]. [[SICAV]]s. An [[investment fund]] [[espievie]] doesn’t usually grant security interests over its assets at all, and it has a much more dispersed, antagonistic bunch of creditors, who are assuredly not on the same page as each other, and, usually, equity holders too.
-There’s a ''weak'' justification [[limited recourse]] — to preserve the livelihoods of [[espievie]] directors who might otherwise be barred from “running” companies due to their reckless trading — but this is a weak reason, and removing it might incentivise the director to, you know, supervise the company’s [[agent]]s to make sure they are conducting themselves with probity. Which is, after all, what directors are paid to do.
+There’s a ''weak'' justification to have [[limited recourse]] here: — to preserve the livelihoods of [[espievie]] directors who might otherwise be barred from holding directorships if companies they manage go ''[[βυζιά πάνω]]'' — but this is a weak reason, and removing it might incentivise the fund’s director to, you know, ''do their jobs'' and properly supervise the company’s [[agent]]s to make sure they are conducting themselves with probity.
-And there’s a rather pressing reason for a [[creditor]] to ''resist'' a limitation on its recourse: creditors, who might otherwise be at each others’ throats, are protected from each other when the company go into receivership. Insolvency rules ensure they’re treated fairly. Such as the rules against [[voidable preference]]s a company grants to its favourite creditors just before it goes ''[[seins en l’air]]''.
+All this might seem a rather arid, even petulant objection, but [[repackaging]] vehicles are a rather special case, and it doesn’t really do to confuse them with regular fund vehicles, which are a lot more like normal companies.
-How might this happen with a harmless, peace-loving [[espievie]]? Well, imagine a fund that has put on aggressively levered positions with several brokers, without telling any of them that it has doubled down on the trade elsewhere. And imagine that trade suddenly goes, ''[[tango uniform]]'', sending the fund auguring into the side of a hill, and sending the cream of each broker’s legal eaglery scurrying for their [[close-out]] manuals. But — oh! — too late. They all try to sell the same stocks at once, into a market which suddenly has zero appetite to buy that stock, except not “suddenly”, really, since the only person who ever had the appetite for the stock in the first place is exactly the clot whose mammaries are currently pointing heavenward because he bought too much of the stuff — that’s what caused the margin call int he first place.
+By resisting [[limited recourse][ creditors, who might otherwise be at each others’ throats, are protected from each other should the company go into receivership. Insolvency rules, such as those against [[voidable preference]]s a company grants to its favourite creditors just before it goes ''[[seins en l’air]]'', ensure fair treatment for everyone.
-Now, saying all that, then it transpires that our now ''[[titten hoch]]'' [[espievie]] got together with one of its brokers on Thursday last week, to close out its positions while all the other brokers were bing good eggs and holding off in the vain hope of being able to engineer an orderly unwind.
+Could such a preference happen with a harmless, peace-loving [[espievie]]? Well, imagine a fund that has put on aggressively levered positions with several brokers, without telling any of them that it has doubled down on the trade elsewhere. And imagine that trade suddenly goes, ''[[tango uniform]]'', prompting a margin call bonanza and sending the cream of each broker’s [[legal eagle]]ry scurrying for their [[close-out]] manuals. But — oh! — too late. They all try to sell the same stocks at once, into a market which suddenly has zero appetite for that stock, except not “suddenly”, really, since the only person who ever ''had'' the appetite for the stock is the one whose udders are currently pointing skyward, and they are pointing that way precisely ''because'' of his ravenous appetite for a crappy stock. Stock falls through the floor, and that of several apartments below.
-Suddenly those voidable preference rules start to look quite appealing to disappointed brokers.
+If it then transpires that our now ''[[titten hoch]]'' [[espievie]] got together with one of its brokers last week, to close out its positions while all the other brokers were being good eggs and holding off in the vain hope of an orderly unwind, then what?  Well, suddenly those voidable preference rules start to look quite appealing to disappointed brokers.
 Which means that a “[[limited recourse]]” contractual provision, by which those [[broker|brokers]] kindly agreed ''not'' to put the [[espievie]] into [[bankruptcy]] should it go ''[[tette in alto]]'', for the sake of its poor little directors, looks like quite the unfortunate legal term.
+At the moment limited recourse is almost ''de rigueur''. It remains to be seen whether it stays that way, or whether some kind of evolution of the clause to allow voidable preference claims to be made even without an actual insolvency.
 {{Sa}}