Investor settles Lehman CSO legal case

By Mike Peterson

One of the investors embroiled in a long-running legal battle over CSOs arranged by Lehman Brothers has settled with the bankrupt investment bank

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TAGS: Law suits

Comment by: Anonymous. Posted 14 years ago [2009-12-22 23:09:40]

It is clearly not good if Lehman can bully investors into paying it ransom money through aggressive legal tactics. Hopefully when the court cases are held in the US, there will be a strong verdict supporting the documentation which will prevent this type of extortion going forward. If not, no sane investor would buy a CSO with a US swap-counterparty as they know if the counterparty fails (as Lehman did) then they'll be in litigation for years trying to get their money back and will probably end up having to give a chunk of it away. Without a strong legal position, Trustees (BNY Mellon case in point on this deal) will definitely not operate the documents and deliver monies to investors when there is a high risk of them getting sued by the bankrupt swap counterparty