- Category
- Client Alerts
- Date
- Feb. 03, 2010
- Title
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Financial Institutions Alert: Enforceability of Subordination Provisions in Synthetic CDOs — A Lehman Perspective
On January 25, 2010, U.S. Bankruptcy Judge Peck struck down a provision that used the bankruptcy of Lehman Brothers Holdings, Inc. to trigger subordination of a Lehman subsidiary’s swap claim against a securitization vehicle in the United Kingdom. The opinion invalidates a standard clause designed to subordinate or "flip" the priority of a swap counterparty’s claim upon a default of either the swap counterparty or its guarantor.
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Related People
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Fabien Carruzzo
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- Partner
- Author
- New York
- vcard
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