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Metavante v Lehman: Difference between revisions
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In which the Southern District of New York Bankruptcy Court found that poor old Metavante Corporation, a [[Non-defaulting party - ISDA Provision|non-defaulting counterparty]] relying on Section {{isdaprov|2(a)(iii)}} to withhold payments under live derivatives with Lehman Brothers Special Financing, Inc. due to a valid pending but un-triggered {{isdaprov|Event of Default}} — all standard operating procedure, so they thought — had to, um, sit or get off the pot. And, by the time they heard the case, it was too late to do either. Ouch ouch ouch. | In which the Southern District of New York Bankruptcy Court found that poor old Metavante Corporation, a [[Non-defaulting party - ISDA Provision|non-defaulting counterparty]] relying on Section {{isdaprov|2(a)(iii)}} to withhold payments under live derivatives with Lehman Brothers Special Financing, Inc. due to a valid pending but un-triggered {{isdaprov|Event of Default}} — all standard operating procedure, so they thought — had to, um, ''sit'' or ''get off the pot''. And, by the time they heard the case, thought their honours, ''it was too late to do either''. Ouch ouch ouch. | ||
In short, the Court held: | In short, the Court held: | ||
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*11 months after the bankruptcy filing was too late for Metavante to suddenly go “oh whoopsie” and trigger early termination. It imposed a [[sunset clause|sunset]] on a Metavante’s right to early termination following a bankruptcy even though there wasn’t one in the {{isdama}} or the [[Bankruptcy Code]] itself. | *11 months after the bankruptcy filing was too late for Metavante to suddenly go “oh whoopsie” and trigger early termination. It imposed a [[sunset clause|sunset]] on a Metavante’s right to early termination following a bankruptcy even though there wasn’t one in the {{isdama}} or the [[Bankruptcy Code]] itself. | ||
===Media=== | ===Media=== | ||
*[http://ftalphaville.ft.com/blog/2009/09/30/74606/lehman-metavante-and-the-isda-master-agreement/ Lehman, Metavante and the ISDA Master Agreement - FT Alphaville] | *[http://ftalphaville.ft.com/blog/2009/09/30/74606/lehman-metavante-and-the-isda-master-agreement/ Lehman, Metavante and the ISDA Master Agreement - FT Alphaville] | ||
{{2(a)(iii)}} | {{2(a)(iii)}} | ||