Hoosier Energy Rural Electric Cooperative, Inc. v. John Hancock Life Insurance

ENTRY ON HOOSIER ENERGY’S MOTION FOR PRELIMINARY INJUNCTION

DAVID F. HAMILTON, Chief Judge.

Introduction

This case provides a case study of some of the worst aspects of modern finance. The case arises from an elaborate transaction that combines the sometimes toxic intricacies of credit default swaps and investment derivatives with a blatantly abusive tax shelter. Investment bankers and lawyers made more than $12 million in fees for putting together the paper transaction known as a “sale in — lease out” or “SILO” transaction of an electrical generating plant. Although all parties have been making…