BOARD CERTIFICATION EXAM STUDY GUIDES Lower Extremity Trauma
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What Is a Special Purpose Vehicle (SPV)?
A special purpose vehicle is a subsidiary created by a parent company to isolate financial risk. It’s also called a special purpose entity (SPE). Its legal status as a separate company makes its obligations secure even if the parent company goes bankrupt. A special purpose vehicle is sometimes referred to as a bankruptcy-remote entity for this reason.
These vehicles can become a financially devastating way to hide company debt if accounting loopholes are exploited, as seen in the 2001 Enron scandal.