The lack of new issuance in U.S. Structured Finance CDOs does not mean the CDO market is twiddling its thumbs. Legal battles, including disputes over cash flow allocations after an event of default (EOD), have sent both buy-siders and sell-siders from the deal rooms to the courtrooms.

The number of subprime-related cases filed in 2007 already equals half of the total 559 Savings and Loan cases handled over a multiple-year period by the Resolution Trust Corp., according to a study released last month by Navigant Consulting. Resolution Trust was a government asset management company charged with liquidating insolvent S&L assets.

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