Another Blow To Triangular Setoff In Bankruptcy

Law360, New York (October 25, 2011, 3:19 PM EDT) -- On Oct. 4, 2011, Judge James M. Peck of the U.S. Bankruptcy Court for the Southern District of New York ruled in In re Lehman Bros. Inc. (Bankr. S.D.N.Y. Oct. 4, 2011), that a “triangular setoff” does not satisfy the Bankruptcy Code’s mutuality requirement and that the Bankruptcy Code’s safe harbor provisions do not eliminate that requirement in connection with setoffs under financial contracts.

The ruling, which involved a broker-dealer liquidation proceeding under the Securities Investor Protection Act, confirmed speculation that multiple-party setoffs under financial contracts...
To view the full article, register now.

UK Financial Services

UK Financial Services

Read Our Latest UK Financial Services Coverage

Financial Services Law360 UK provides breaking news and analysis on the financial sector. Coverage includes UK and European Union policy, enforcement, and litigation involving banks, asset management firms, and other financial services organizations.