What is Bankruptcy Remote?
A bankruptcy-remote structure legally isolates assets so they cannot be claimed by creditors if the parent company or issuer goes bankrupt. This protects investors in tokenized asset offerings.
Key Features
- Legal separation: Assets held in independent SPV
- Limited recourse: Parent company cannot access SPV assets
- Independent directors: Prevent voluntary bankruptcy filing
- Non-petition clauses: Creditors cannot force SPV bankruptcy
Importance for RWAs
Bankruptcy remoteness is critical for tokenized treasuries, real estate, and other RWAs where investors need assurance their claims survive issuer failure.