Lehmans Dante flip appeal flops

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The Independent Online

The Supreme Court has unanimously upheld previous UK rulings that creditors should have priority in Lehman Brothers' $12bn (£7.4bn) "Dante" programme of CDOs, which one judge described as "of a purgatorial complexity".

The case hinges on whether a "flip" clause can be enforced in a bankruptcy. The court said it relied, in part, on the 200-year-old "anti-deprivation rule" that in the event of a bankruptcy, property cannot be taken away from creditors. But a New York court last year directly contradicted UK courts by ruling the flip clause was unenforceable.

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