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Simple English definitions for legal terms

bankruptcy-remote entity

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A quick definition of bankruptcy-remote entity:

A bankruptcy-remote entity is a type of business that is designed to minimize the risk of becoming bankrupt. It has a special organizational structure that requires a unanimous vote by its directors and at least one independent director before filing for bankruptcy. This type of entity is usually created to perform limited functions, such as purchasing and holding financial assets that generate revenue. It also has only one or a few primary creditors to reduce the likelihood of involuntary bankruptcy. A bankruptcy-remote entity may issue securities instead of receiving a loan from a financial institution.

A more thorough explanation:

A bankruptcy-remote entity is a type of business that is designed to minimize the risk of becoming bankrupt. It is usually created to perform limited functions, such as purchasing and holding financial assets that generate revenue. The entity's organizational charter requires at least one independent director to be appointed, and a unanimous vote by the entity's directors before a bankruptcy petition may be filed. This type of entity has only one or a few primary creditors to reduce the likelihood of an involuntary bankruptcy.

For example, a company may create a bankruptcy-remote entity to purchase and hold accounts receivable. This entity would have only one or a few primary creditors, reducing the risk of bankruptcy. The organizational charter would require a unanimous vote by the entity's directors before a bankruptcy petition may be filed, further reducing the risk of bankruptcy.

Another example is a special-purpose entity established to develop, own, and operate a power plant. The lender would look primarily to the money generated by the power plant as security for the loan. The lender would be paid solely or primarily from the money generated by the contracts for the facility's output, such as the electricity sold by the power plant. The special-purpose entity would be a bankruptcy-remote entity, reducing the risk of bankruptcy.

bankruptcy proceeding | Bank Secrecy Act

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Dkk
19:42
Maybe, didnt happen last time.
19:42
it was hard to not improve it. google search was terrible due to the ads and seo cheaters with buzz words and alt text
Dkk
19:42
SEO is big money
2016 pushed the conservative party into populism irreversibly
Dkk
19:43
Maybe, but if this is populism, then every election is populist.
19:43
@Dkk: yeah register 1 website and every swinging tom dick and harry calls/emails/texts to 'help with seo'. like bruh, if YOU found it, what i am doing is working
Dkk
19:43
Indeed!
19:48
wasp, i think people are hopeful for a gov who at least attempts to care about the common man
MIAMI A
[] AromaticTroubledDormouse
20:55
How does one know if they are UR1 or UR2?
[] AromaticTroubledDormouse
20:56
CONGRATS MACAQUE!
TY
got a random stanford email and almost had a heart attack
ALSO CONGRATS!
Congrats1!
21:15
Miami A, yall I'm so excited I could cry.
21:15
Feel like I can finally stop holding my breath!! Whew!!!
[] baddestbunny
22:16
every time I get accosted by a strange man who follows me around because my male coworkers were too busy talking to walk me back to my car I get closer to saying we need to bring back traditional gender roles
Dkk
22:32
Nice! @Macaque
Dkk
22:32
@Aromatic, Have to guess.
Dkk
22:33
That sucks @Bunny do you have to go to the hospital?
[] baddestbunny
22:40
I said accosted not assaulted
23:35
guys. my notre dame address just went long is this good or bad
1a2b3c4d26z
23:37
Oooooo me too
23:37
omg is this good or bad
Dkk
23:47
Idk if gender roles are gunna fix that then.
23:49
it looks like most people who applied in october last cycle didn't get a decision until january... does it even mean anything that our addresses went long??
hows ED 2 compared to ED 1?
Dkk
0:10
No idea
windyMagician
0:34
reporting live to say my ndls address also went long
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