The Importance Of LBSF V. BNY Corp.

Law360, New York (February 23, 2010, 2:55 PM EST) -- On Jan. 25, 2010, the U.S. Bankruptcy Court for the Southern District of New York decided an issue of major importance in the bankruptcy of Lehman Brothers Special Financing (“LBSF”) and its affiliates.

In this summary judgment decision, Lehman Brothers Special Financing Inc. v. BNY Corporate Trustee Services Ltd., Ch. 11 Case No. 08-13555. Adv. No. 09-01242 (Jan. 25, 2010), the court held that market-standard provisions in structured finance transactions that subordinate swap termination payments upon a swap counterparty default are not enforceable when the default...
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