Definition for : Comingling risk
The "comingling Risk" designates the Risk that Assets owned legally by a third party become - in case of Bankruptcy - comingled (mixed) with the Bankruptcy estate. This situation can for instance arise in the context of a Trade receivables Securitisation when the payments made by debtors pursuant to securitised Receivables have been credited on the originator's normal business account, and ended up being mixed up with other funds.
(See Chapter 46 Leveraged buyouts (LBOs) of the Vernimmen)
To know more about it, look at what we have already written on this subject