SFIG Seeks Leave to File Amicus Brief in Lehman Flip-Clause Case

On Friday, June 2nd, SFIG filed a request with the U.S. District Court in the Southern District of New York (SDNY) to seek leave to file an amicus brief in the case of Lehman Brothers Special Financing Inc. v. Bank of America National Association et al. Lehman is appealing the July 2016 decision of the U.S. Bankruptcy Court to dismiss the case, and SFIG will be filing an amicus brief in support of the defendants. The defendants' brief is due on June 9th, and if allowed, SFIG's brief will be due June 16th. The case considers the treatment of a so-called "flip clause" in a securitization waterfall in the event of a bankruptcy. A "flip clause" redirects or reprioritizes cash flow upon bankruptcy, and often comes up in securitizations that include swaps. 

SFIG previously submitted an amicus brief to the U.S. Bankruptcy Court in December 2015, drafted by Freshfields Bruckhaus Deringer. The brief supported the Noteholder Defendants' motion to dismiss the Lehman Brothers complaint. SFIG's motivation in filing the amicus brief was driven in large part to avoid the market uncertainty that would likely result from a ruling favorable to Lehman Brothers.

If you are interested in joining SFIG's Legal Counsel Committee, please contact Alyssa.Acevedo@sfindustry.org.

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