Financing Co.'s Bid To Change CDO Payout Nixed By 2nd Circ.

Law360, New York (January 29, 2013, 4:55 PM EST) -- The Second Circuit on Tuesday affirmed a lower court's ruling against a New Jersey-based financing company in a suit over payments tied to failed collateral debt obligations now held by Bank of America NA.

A three-judge panel said that U.S. District Judge Jed Rakoff did not err in ordering that principal payments on the failed CDOs' highest-priority A-1 notes be paid before interest payments due to A-2 noteholders, which include appellant Loreley Financing No. 8 Ltd.

The ruling means that Loreley can't change the order of...
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