Abstract
Pledgors in derivative transactions commonly grant "use" or "rehypothecation" rights to the secured party. This right entitles the secured party to use, pledge, or sell the pledged collateral prior to the pledgor satisfying its obligations to the secured party. Granting this right, however, places the pledgor at risk in the event that the secured party becomes insolvent or bankrupt prior to returning the collateral. Although a pledgor may be able to set off its obligations to the secured party against the unreturned collateral, there are also other protections that the pledgor should consider prior to granting a right of rehypothecation.
How to Cite
39 Ariz. L. Rev. 949 (1997)
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