Lehman Court Holds BNY/Perpetual Securitization Swap-Payment Provision Unenforceable | Practical Law

Lehman Court Holds BNY/Perpetual Securitization Swap-Payment Provision Unenforceable | Practical Law

An update on the ruling in the Lehman vs. BNY case (known as Perpetual), holding that a market-standard provision in a securitization deal known as a flip clause, which is designed to subordinate swap payments when the swap provider defaults under the swap, is not enforceable if the default is triggered by a bankruptcy filing of the swap provider.

Lehman Court Holds BNY/Perpetual Securitization Swap-Payment Provision Unenforceable

Practical Law Legal Update 3-501-3557 (Approx. 6 pages)

Lehman Court Holds BNY/Perpetual Securitization Swap-Payment Provision Unenforceable

by PLC Finance
Published on 28 Jan 2010USA (National/Federal)
An update on the ruling in the Lehman vs. BNY case (known as Perpetual), holding that a market-standard provision in a securitization deal known as a flip clause, which is designed to subordinate swap payments when the swap provider defaults under the swap, is not enforceable if the default is triggered by a bankruptcy filing of the swap provider.