Shearman & Sterling's Steven Sherman (London-Finance), Patrick Clancy (London-Finance), Bjorn Bjerke (New York-Finance) and Reade Ryan (New York-Finance) have published an article in International Financial Law Review examining what New York law participation agreements do and don't do when applied to English law loan transactions. Clifford Atkins (London-Finance) also contributed to the article.

In the wake of the Lehman insolvency, investors and lawyers have worked to legally isolate financial assets held by distressed UK financial institutions. Transactions are structured so that such assets will not be treated as part of the estate of such financial institution during an English insolvency proceeding. This issue is particularly relevant in the robust market of loan sales. 

This article examines the rights arising under a New York law participation agreement and the treatment of those rights as to the ownership of the respective loan assets, in each case for purposes of an English law insolvency proceeding.

View full article on Participation Agreements, Bridge Across the Pond