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Repo Madness: The Characterization Of Repurchase Agreements Under The Bankruptcy Code And The U.C.C., Jeanne L. Schroeder Jan 1995

Repo Madness: The Characterization Of Repurchase Agreements Under The Bankruptcy Code And The U.C.C., Jeanne L. Schroeder

Articles

The article examines the legal characterization of repurchase agreements (repos) under the Bankruptcy Code and the Uniform Commercial Code (U.C.C.), with a focus on proposed revisions to Articles 8 and 9. It argues that repos should be treated as sales rather than secured loans, primarily due to the repo buyer's unrestricted right to deal with the collateral. This characterization is supported by court rulings in cases such as In re Bevill, Bresler & Schulman and SEC v. Drysdale Securities Corp., which emphasize the transfer of ownership and the buyer's ability to engage with the securities. The article critiques current methods …