Lehman-Swedbank Decision Holds that Mutuality Must Exist to Exercise Right of Setoff Under Swap | Practical Law

Lehman-Swedbank Decision Holds that Mutuality Must Exist to Exercise Right of Setoff Under Swap | Practical Law

A detailed discussion of the Lehman Bankruptcy Court's Swedbank decision, in which it held that the safe harbors of the Bankruptcy Code do not override the Code's mutuality requirement for setoff.  The Article also discusses the Delaware Bankruptcy Court's decision in In re Semcrude, which, when read together with Swedbank, could be interpreted to proscribe triangular setoff under agreements safe harbored under the Bankruptcy Code in the bankruptcy context. The Article also discusses related cases In re England Motor Co. and In re Garden Ridge Corp.

Lehman-Swedbank Decision Holds that Mutuality Must Exist to Exercise Right of Setoff Under Swap

by Peter Marchetti, Assistant Professor of Law, Florida Coastal Law School
Published on 07 Jun 2011 • USA (National/Federal)
A detailed discussion of the Lehman Bankruptcy Court's Swedbank decision, in which it held that the safe harbors of the Bankruptcy Code do not override the Code's mutuality requirement for setoff. The Article also discusses the Delaware Bankruptcy Court's decision in In re Semcrude, which, when read together with Swedbank, could be interpreted to proscribe triangular setoff under agreements safe harbored under the Bankruptcy Code in the bankruptcy context. The Article also discusses related cases In re England Motor Co. and In re Garden Ridge Corp.