District Court Grants BNY Leave to Appeal Bankruptcy Court’s Interlocutory Order In Lehman, Prohibiting Enforcement Of Ipso Facto Clause In Swap

On September 21, 2010, the United States District Court for the Southern District of New York granted BNY Corporate Trustee Services Limited leave to appeal a decision of the Bankruptcy Court in the Lehman Brothers bankruptcy case.1 The Bankruptcy Court held that a key provision of certain transaction documents constituted an unenforceable ipso facto clause. The District Court granted leave to appeal the Bankruptcy Court decision even though it was interlocutory. The District Court held that the case warranted interlocutory review because the Bankruptcy Court decision represented a controversial question of first impression and because appellate review would advance resolution of the litigation. http://www.cadwalader.com/assets/client_friend/101310DistrictCourtGrantsBNYLeave.pdf#page=1