Structuring Special Purpose Entities: Separateness, Bankruptcy Remoteness and True Sales

Recording of a 90-minute CLE webinar with Q&A

Conducted on Tuesday, September 12, 2017

Recorded event now available

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Program Materials

This CLE webinar will prepare bankruptcy and finance counsel to structure special purpose entities (SPEs) to achieve bankruptcy remoteness and avoid substantive consolidation. The panel will discuss lessons from recent bankruptcy cases involving SPE entities.


SPEs are intended to protect an entity’s assets against credit risks of other entities, including the former owner of the assets. Legal separation is achieved by three structuring techniques: true sales, SPEs (including separateness covenants), and bankruptcy-remote vehicles.

The bankruptcy-remote SPE must be structured so it is unlikely to file, or have filed against it, a bankruptcy petition, as well as prevent substantive consolidation with the transferor in the event of the transferor’s bankruptcy.

SPE bankruptcy-remote strategies continue to be tested in bankruptcy cases. Counsel must understand and apply lessons from recent case law to draft structured-financing documentation that minimizes bankruptcy risks.

Listen as our authoritative panel of attorneys discusses best practices for structuring SPEs to achieve bankruptcy remoteness and avoid substantive consolidation. The panel will review recent bankruptcy rulings impacting bankruptcy proofing strategies.



  1. Bankruptcy remoteness: Development of SPEs with internal protections against bankruptcy
  2. Structural features of SPEs
    1. Restrictions on activities
    2. Restrictions on ability to voluntarily file bankruptcy
    3. Judicial treatment of bankruptcy waivers
  3. Substantive consolidation
  4. True sale vs. pledge
  5. Issues arising from SPE bankruptcy filing
    1. Authority to file
    2. Involuntary bankruptcies
    3. Dismissal for bad faith filing
    4. Fiduciary obligations
    5. Springing or “bad boy” guaranties


The panel will review these and other key issues:

  • What factors are relevant in determining whether the transfer of assets to the SPE will be considered a true sale?
  • How should the SPE be structured to maximize bankruptcy remoteness?
  • What will courts consider in deciding whether substantive consolidation of the SPE and the transferor is warranted in a subsequent bankruptcy of the transferor?


Denny, Daniel
Daniel B. Denny

Gibson Dunn & Crutcher

Mr. Denny has a wide range of experience representing debtors, creditor groups and potential acquirers in distressed...  |  Read More

Newman, Samuel
Samuel A. Newman

Gibson Dunn & Crutcher

Mr. Newman is a member of the firm’s Business Restructuring and Reorganization Group and the Corporate...  |  Read More

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