CDS Setting: Unilateral Mistake, Waiver Of Claims

Law360, New York (December 2, 2008, 12:00 AM EST) -- From the United States District Court for the Southern District of New York comes a timely warning to credit default swap (CDS) protection buyers and sellers about the financial loss that can be sustained by a party that does not understand its precise obligations under these complex arrangements.

The decision in VCG Special Opportunities Master Fund Limited v. Citibank, No. 08-01563, 2008 WL 4809078 (S.D.N.Y. Nov. 5, 2008) instructs that a party’s mistaken understanding about its obligations under a CDS does not relieve it from its...
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