Lehman vs Moore in swaps safe harbour showdown
Lawyers cool on Lehman's chances, but warn victory would harm swaps market
Seven years after its bankruptcy filing, Lehman Brothers has the potential to again upend the derivatives market – this time, by weakening one of its legal cornerstones, the right to immediately net and settle trades with a defaulted counterparty, rather than waiting in line during the bankruptcy process.
Lawyers for Lehman's estate claim New York-based hedge fund Moore Capital misused this safe harbour – part of the US bankruptcy code – in 2008 to cut $20 million from the sum it owed the bank
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