Lehman, CDO Issuer Spar Over Credit Default Swap

Law360, New York (May 6, 2009, 12:00 AM EDT) -- Lehman Brothers Holdings Inc. and the issuer of a collateralized debt obligation are fighting over whether the erstwhile investment behemoth's bankruptcy should have ended a deal protecting the bank from up to $1 billion in mortgage-backed securities losses.

On Tuesday, both Lehman and Libra CDO Ltd. and the CDO's trustees, including Bank of America NA, filed adversary proceedings in the U.S. Bankruptcy Court for the Southern District of New York.

The agreement at issue is a credit default swap between Lehman and Libra. Under the deal,...
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