Lehman Court Holds BNY/Perpetual Securitization Swap-Payment Provision Unenforceable | Practical Law
An update on the ruling in the Lehman vs. BNY case (known as Perpetual), holding that a market-standard provision in a securitization deal known as a flip clause, which is designed to subordinate swap payments when the swap provider defaults under the swap, is not enforceable if the default is triggered by a bankruptcy filing of the swap provider.