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Client Alerts
Aug. 17, 2009

Corporate Restructuring and Bankruptcy Alert: Special Purpose Entities - The New Chapter 11 Debtors: General Growth Bankruptcy Court Takes the "Remoteness" Out of Bankruptcy Structured Earnings

This Corporate Restructuring & Bankruptcy Department Client Alert includes an overview of Judge Gropper's recent opinion on the motions to dismiss filed in the General Growth bankruptcy. The opinion provides justification for the filing of special purpose entities ("SPE") debtors (SPE's are bankruptcy remote, not bankruptcy proof). Moreover, the opinion discusses how, for purposes of a motion to dismiss, the Court can consider the dismissals effect on the "corporate family" and not just on the individual SPE debtor. This opinion creates harmful precedent to the notion that an SPE should not or does not belong in bankruptcy.

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