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Liquidation Collateralized Debt Obligations

Kramer Levin Naftalis & Frankel LLP

Second Circuit Holds That So-Called “Flip” Clause Payments Are Protected by Section 560 of the Bankruptcy Code

In Lehman Brothers Special Financing Inc. v. Branch Banking & Trust Co. (In re Lehman Brothers Holdings Inc.), No. 18-1079, --F.3d--, 2020 WL 4590247 (2d Cir. Aug. 11, 2020), the Second Circuit held that provisions in a swap...more

Faegre Drinker Biddle & Reath LLP

Second Circuit Holds That CDO Swap Payment Priority-Shifting Provisions Are Covered by Section 560 Safe Harbor

After nearly 10 years of litigation, the Second Circuit has weighed in on an appeal in an adversary proceeding arising out of the Lehman Brothers bankruptcy. The August 11, 2020, decision confirms that a trustee’s termination...more

Cadwalader, Wickersham & Taft LLP

Second Circuit’s Lehman Flip Clause Decision Continues the Expansion of the Bankruptcy Code Safe Harbors

On August 11, 2020, the United States Court of Appeals for the Second Circuit affirmed lower court decisions rejecting Lehman Brothers Special Financing Inc.’s (“LBSF”) attempt to recover nearly $1 billion in payments to...more

Orrick, Herrington & Sutcliffe LLP

Second Circuit Affirms Enforceability of Flip Provisions in Swap Agreements Under Bankruptcy Code Safe Harbor

For over a decade, Lehman Brothers Special Financing (“LBSF”) has been litigating the enforceability of so-called “flip clauses” in connection with the post-bankruptcy liquidation of swap agreements. These clauses, which are...more

Dechert LLP

Second Circuit Affirms Enforceability of Swaps’ Flip Provisions

Dechert LLP on

Swaps, together with repurchase agreements, forward contracts, securities contracts and commodities contracts receive special treatment under the bankruptcy code-they are largely exempt from the automatic stay, bankruptcy...more

Orrick - Finance 20/20

Bear Stearns Liquidators Brings Fraud Action Against Rating Agencies

Orrick - Finance 20/20 on

On July 9, the joint official liquidators of Bear Stearns & Co. Inc. filed suit against three rating agencies – Standard & Poors, Moody’s and Fitch – in New York state court over the agencies’ allegedly fraudulent investment...more

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