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Single Agreement

The “Single Agreement” provision of the 2011 GMRA (Paragraph 13) is primarily an attempt to protect Repurchase Transactions entered into under the GMRA against the risk of ‘cherrypicking’ (in other words, an attempt by a liquidator to repudiate transactions which are not profitable to the estate of the bankrupt entity which it is representing whilst, at the same time, enforcing transactions which are profitable to the insolvent estate).

Paragraph 13 of the 2011 GMRA attempts to achieve this by clarifying that:

  1. Firstly, a default in relation to any one Transaction shall be taken as a default in relation to all Transactions; and
  2. Secondly, payments, deliveries and other transfers made in respect of any Transaction shall be deemed to have been made in consideration of payments, deliveries and other transfers in respect of any other Transactions.

Whether this type of provision is enforceable in any particular jurisdiction is one of the main topics addressed by legal opinions commissioned by ICMA, the industry body responsible for the drafting of the GMRA.

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