U.K. Supreme Court Upholds Flip Clause
The U.K. Supreme Court today upheld the flip clause in Lehman Brothers’ synthetic collateralized debt obligations which made Lehman subordinate to noteholders in the waterfall of payments when the firm filed for bankruptcy in 2008. The ruling highlights the differences in U.K. and U.S. law on the matter and could lead to increased scrutiny on the jurisdiction of parties involved in structured credit deals in the future.
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