Conceived in credit rating agency laboratories in New York, this creature supposedly guards the doors of the bankruptcy courts from feckless debtors bearing frivolous bankruptcy petitions.
According to the standard rating agency definition, a member of the board of directors or managers of a corporation or limited liability company who has not been, while serving as a director or manager of the entity or within the preceding five years, any of the following: (1) a direct or indirect legal or beneficial owner of the entity or any of its affiliates; (2) a creditor, supplier, customer, employee, officer, director, family member, manager, or contractor of the entity or any of its affiliates; or (3) a person who directly or indirectly controls the entity or any of its affiliates, or any creditor supplier, employee, officer, director, manager or contractor of the entity or any of its affiliates.
See also Bankruptcy Proof, Securitization, Special (or Single) Purpose Bankruptcy Remote Entity.