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The suspense ends: court says certain ISDA bankruptcy defaults can be cured
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In 2012 the Court of Appeal ruled that the counterparties of Lehman Brothers International (Europe) (LBIE) who had transacted under ISDA Master Agreements could suspend payment to the administrators indefinitely for so long as the Event of Default occasioned by the appointment of the administrators was continuing. As it has become ever clearer that LBIE will one day exit administration as a going concern (on a solvent basis) the administrators have maintained that the Event of Default will cease to be continuing and the holdouts will have to pay up. In one of the first cases to be heard virtually at the start of the COVID-19 pandemic the administrators were finally able to ask the court whether implementation of their proposals for ending the administration would mean that the Event of Default was no longer continuing. This autumn the court ruled for the administrators.1 In addition to discussing...
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