How a CDS has more than one role in a bankruptcy . . .

We’re all learning a good deal about credit derivative swaps (CDSs) these days.  The point of the CDS, of course, is to protect parties from defaults on bonds.  Turns out that this protection can have a significant effect on the incentives of those who whold bonds in failing companies, according to this piece by Charles Davi of the Atlantic.magazine.

[Frank Snyder]