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Do you feel the same?

posted by Stephen Lubben

Over at Dealbook, I look at the very different treatment awaiting unsecured creditors of Countrywide, depending on whether they are bondholders or tort litigants.


Stuart's question over there about potential equitable subordination of the bondholders' claims is intriguing. It seems to me that subordination in the CW bankruptcy would not affect the bondholders' rights against BAC on the guarantee (whether they collect something or nothing in the CW case, they still get paid in full by BAC, no?). Nonetheless, equitable subordination would at least reserve any value that CW has for the fraud victims. Is there any value in the CW entity, or would this be a fight not worth fighting?

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