By James Bentley ( November 30, 2018, 11:43 AM EST) -- On Nov. 8, 2018, in a decision of significant importance to the securitization market, a bankruptcy court dismissed an involuntary Chapter 11 bankruptcy case commenced by three noteholders, or petitioning creditors, against Taberna Preferred Funding IV Ltd., an issuer of collateralized debt obligations.[1][2] In a well-reasoned and thoughtful opinion, the U.S. Bankruptcy Court for the Southern District of New York held in Taberna Preferred Funding IV Ltd. v. Opportunities II Ltd. that the petitioning creditors failed to satisfy one of the key requirements to commence an involuntary bankruptcy case because they were not creditors of Taberna itself. Rather, the petitioning creditors' claims arose under nonrecourse notes Taberna issued and thus, their claims were limited to the collateral securing their notes. Therefore, the petitioning creditors did not hold claims against Taberna....