One of the many issues which arose from the collapse of Lehman Brothers was whether “flip provisions”, which reverse a swap counterparty’s priority in the order of payment on insolvency, were invalid on the basis that they contravened the anti-deprivation principle. This is a long-established common law principle which seeks to prevent an insolvent party from arranging its affairs to frustrate the legitimate claims of creditors.
United Kingdom, Derivatives, Insolvency & Restructuring, Litigation, King & Wood Mallesons, Swap (finance), Good faith, Common law, Lehman Brothers cases, Lehman Brothers, Supreme Court of the United States