Lehman vs Moore in swaps safe harbour showdown

Lawyers cool on Lehman's chances, but warn victory would harm swaps market

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Lehman Brothers: lawyers claim Moore Capital misused safe harbour

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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