Dismissal of Involuntary Bankruptcy Petition Against Taberna CDO is Win for Securitization Industry

11/20/2018  ·  by Cadwalader  ·  Securitization Accounting Issues  ·  Amicus Briefs

On November 8, 2018, Judge Vyskocil of the U.S. Bankruptcy Court for the Southern District of New York issued a decision dismissing the involuntary petition that had been filed against Taberna Preferred Funding IV, Ltd. (“Taberna”), a non-recourse CDO, thus ending a nearly seventeen-month-long saga that was followed closely by bankruptcy practitioners and securitization professionals alike. See Taberna Preferred Funding IV, Ltd. v. Opportunities II Ltd., et. al., (In re Taberna Preferred Funding IV, Ltd.), No. 17-11628 (MKV), 2018 WL 5880918, at *24 (Bankr. S.D.N.Y. 2018). Judge Vyskocil’s decision to dismiss the involuntary petition came in response to a motion filed by certain of Taberna’s junior noteholders that were fighting against senior noteholders’ attempt to use the chapter 11 process to liquidate the Taberna CDO’s collateral in an accelerated fashion in a manner inconsistent with the terms of the underlying indenture.

Tags: CDO  ·   securitization  ·   clo  ·   cmbs  ·   taberna cdo  ·   non-recourse  ·   bankruptcy  ·