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Bankruptcy and the New Uniform Special Deposits Act: Insulating Depositor Funds From the Reach of Most Creditors

A live 90-minute CLE video webinar with interactive Q&A

This program is included with the Strafford CLE Pass. Click for more information.
This program is included with the Strafford All-Access Pass. Click for more information.

Thursday, July 18, 2024

1:00pm-2:30pm EDT, 10:00am-11:30am PDT

Early Registration Discount Deadline, Friday, June 21, 2024

or call 1-800-926-7926

This CLE webinar will review the Uniform Special Deposits Act (SDA), a new state law promulgated by the Uniform Law Commission and recommended for enactment nationwide. Special deposits can serve an important function in commerce and industry by affording safety and security to the funds deposited in such an account. Regrettably, the current common law of special deposits has been fraught with ambiguities and inconsistencies which have undermined the utility of the device. The panel will discuss the legal uncertainties and the four “mischiefs” which have plagued the common law of special deposits for many years and how the SDA will clarify the law and remedy those mischiefs. The panel will also explain why the SDA is of tremendous benefit and significance to bankruptcy practitioners and secured lenders. Among other provisions, the panel will review the “opt-in” feature of the law and the special choice of law and forum selection rules.


Special deposits are accounts established and funded by a depositor with a depository bank for a “permissible purpose” and only payable to one or another of at least two (2) potential beneficiaries upon the occurrence of a stated contingency set forth in a written special deposit account agreement. Special deposits are highly beneficial to protect funds in a variety of transactions including real estate sales, business mergers and acquisitions, litigation and arbitration settlements, distribution of tenant security deposits, distributions of funds in class action settlements, settlement of payment systems and more. These special deposits are not used more frequently today because of so many uncertainties about everything from how to establish them to what protections they have.

Under the uniform SDA law, which the American Bar Association, the American College of Commercial Finance Lawyers and the New York City Bar Association Committee on Commercial Law and Uniform State Laws have all endorsed, a special deposit meeting the SDA's requirements would be protected against claims asserted against the deposit in a bankruptcy proceeding, creditor process and even the depository bank’s right of setoff and recoupment, in each case pending the determination of the contingency and hence the beneficiary or beneficiaries entitled to payment.

The SDA also carefully protects the special deposit from being used for a fraudulent purpose.

It will be important for bankruptcy attorneys and attorneys for lenders with Article 9 security interests in deposit accounts to understand enforcement limitations with respect to special deposit accounts and the limits on set-off and recoupment rights.

Listen as the panel of expert banking, bankruptcy and lender attorneys reviews the SDA and gives attendees a head start on understanding this new law.



  1. SDA history and objectives
  2. Key provisions
  3. Impact on bankruptcy
  4. Enactment


The panel will review these and other key issues:

  • What are the “Four Mischiefs” which the SDA resolves?
  • What types of transactions would benefit from utilizing the special deposit device?
  • What happens when the funds in the special deposit account are insufficient to satisfy the contingency?
  • How do the choice of law and venue provisions of the SDA apply?
  • How would the SDA's venue provisions mesh with the Bankruptcy Code's venue provisions?
  • What are permissible purposes for special deposit accounts?
  • How will special deposit accounts be treated in bankruptcy?


Guida, Patrick
Patrick A. Guida

Senior Counsel
Duffy & Sweeney

Mr. Guida is part of the firm’s banking and finance, business law, and real estate law teams. He has been...  |  Read More

Harbour, Jason
Jason W. Harbour

Hunton Andrews Kurth

Mr. Harbour regularly represents all major constituencies in formal bankruptcy proceedings and in out-of-court...  |  Read More

Michael M. Wiseman
Michael M. Wiseman

Sullivan Cromwell

He specializes in banking and financial institutions law, representing domestic and foreign commercial banks,...  |  Read More

Attend on July 18

Early Discount (through 06/21/24)

Cannot Attend July 18?

Early Discount (through 06/21/24)

You may pre-order a recording to listen at your convenience. Recordings are available 48 hours after the webinar. Strafford will process CLE credit for one person on each recording. All formats include course handouts.

To find out which recorded format will provide the best CLE option, select your state:

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