The non-consolidation of special purpose entities with the seller of financial assets is a prerequisite of every properly structured securitization transaction.

On May 1, the United States Supreme Court denied the petition for a hearing filed by a creditors committee of Owens Corning, Inc. with respect to the Third Circuit Court of Appeals' decision regarding substantive consolidation. As a result, the guidelines for determining whether substantive consolidation is appropriate are now settled in the Third Circuit. Likewise, the case has profound and wide-ranging precedential implications in terms of validating substantive consolidation in other circuits.

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