1310006 Informal Interpretation

Date:
Rule:
15 USC 18a(c)(1) – 7(a)(c)(1)
Staff:
Michael Verne
Response/Comments:

As long as the UPE of the seller is not exiting the business of extended credit, 7A(c)(1) will cover it. Creditor claims are the type of financial instruments we have extended this exemption to. K Walsh concurs.

Question

From: (Redacted)
Sent: Wednesday, October 30, 2013 10:55 AM
To: Verne, B. Michael; Walsh, Kathryn
Subject: Question regarding ordinary course exemption

Mike/Kate:

Could you confirm that the PNO's position with respect to acquisitions by a third party of creditor claims in bankruptcy are eligible for the ordinary course exemption under 7A(c)(1)and 802.1? (See informal interpretation #0410002.) If so, which of the following is necessary/sufficient for the analysis?

· The ultimate parent entity of the seller remains in the business of extending credit (as with acquisitions of loans).

· The ultimate parent entity of the seller sells creditor claims in the ordinary course of its business.

· The acquirer buys creditor claims in the ordinary course of its business (the interpretation above states that this is not necessary).

· The acquirer buys financial instruments (which may or may not include creditor claims) in the ordinary course of its business.

 

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