C-Bass filing may herald CDO chapter 11 stampede

By Mike Peterson

Monday, November 15, 2010

The decision of C-Bass to file for bankruptcy on Friday may be just the start of a trend for CDO managers to file for bankruptcy, say market sources

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Comment by: Anonymous. Posted 13 years ago [2010-11-15 21:49:47]

It would seem hard to argue that a bankruptcy of the manager should not be a termination event. The manager is supposed to be there to be performing a service to investors. The point of termination triggers is to protect the investors before things go wrong and allow them to replace the manager not after the manager has declared bankruptcy sacked all its staff and has made other breaches of the contract. It is also bad precedent. If the manager loses its rights in a bankruptcy it would be more motivated to sell its management rights pre-bankruptcy and provide less disruption to investors. Yet another example of everyone looking at it from their own perspective and not the investors

CLOs

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