Landmark Lehman Subordinated Debt Ruling

The High Court in London gave judgment on Friday, 3 July 2020 on the relative ranking of over $10 billion of subordinated liabilities in the administrations of two entities in the Lehman Brothers group.

The judgment covers a series of important issues for restructurings and insolvencies, including: the provability and relative ranking of regulatory subordinated debts, the effect of partial guarantee payments on the provable values of creditors’ claims, the discounting of future claims, the provability of future interest, the construction of settlement agreement releases, and rectification of amendments where their impact on ranking was “simply not considered”.

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