SDNY bankruptcy court upholds swap provision that modifies the method to calculate amounts owing upon the counterparty’s bankruptcy

TheLehman Brothers bankruptcy court has determined that the contractually specified methodology for conducting the liquidation of a swap agreement is protected by the safe harbor provisions of the bankruptcy, even if the selected methodology would be more favorable to the non-defaulting counterparty than the liquidation methodology that would apply absent the bankruptcy.See Michigan State Housing Dev. Auth. v. Lehman Bros. Deriv. Prods. Inc. (In re Lehman Bros. Holdings Inc.), No. 08-13555, ---B.R.

Filed under:
USA, New York, Derivatives, Insolvency & Restructuring, Litigation, Alston & Bird LLP, Bankruptcy, Swap (finance), Liquidation, International Swaps and Derivatives Association, Lehman Brothers, United States bankruptcy court, US District Court for SDNY
Authors:
David A. Wender , Jason H. Watson , Aimee M. Cummo , Karen Gelernt , John Spears
Location:
USA
Firm:
Alston & Bird LLP