David Karp, Co-Head of Special Situations & Alternative Investments, analyzes the ZING VII bankruptcy, highlighting how senior noteholders successfully used the Chapter 11 process to accelerate liquidation of a distressed CDO despite structural protections intended to limit insolvency filings. He explains that the case underscores the limits of so-called “bankruptcy remote” structures, demonstrating that such provisions may not prevent certain creditors from initiating proceedings depending on how they are drafted. Karp notes that while the settlement resolved key disputes, the case leaves important legal questions unanswered and serves as a cautionary example for investors to closely evaluate governing documents and risk allocation in structured finance transactions.