September 15, 2014
The Firm filed a third amended lawsuit on behalf of Lehman Brothers Special Financing Inc. (“LBSF”) against dozens of financial entities, in their capacities as Trustees, Issuers and Noteholders. LBSF is a party to numerous credit default swap agreements (the “Swap Agreements”) pursuant to which it purchased credit protection from the Issuers in connection with 47 collateralized debt obligation transactions (“CDOs”). Lehman Brothers Holdings Inc. (“LBHI”) is LBSF’s credit support provider and guarantor under the Swap Agreements. LBSF filed the third amended complaint (i) to prevent certain unenforceable ipso facto clauses from improperly modifying LBSF’s right to priority of payment of more than three billion dollars under certain transaction documents related to credit default swap agreements based solely upon LBSF and its ultimate parent, LBHI, filing for bankruptcy, and (ii) to recover funds that were improperly paid to the Noteholders. [Lehman Brothers Special Financing Inc. v. Bank of America, N.A., et al., Chapter 11 Case No. 08-13555 (JMP); Adversary Proceeding No. 10-03547 (SCC)]
A copy of the Third Amended Complaint is available here.