SG settles with Lehman over CDO priority claim

23 Sep 2010

Société Générale and Lehman Brothers have agreed a $445m settlement in a dispute over swap termination payments, the first such settlement since a US court ruled that so-called flip clauses were not enforceable.

 If the settlement is approved by the bankruptcy court, Société Générale will pay Lehman $370m and also guarantee a further $75m of recoveries arising from two Lehman CDOs of ABS to which SG was a swap counterparty. If recoveries exceed that amount — they are estimated at $195m ...

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