The litigation in England concerning the validity of the “flip” provisions in the Lehman credit default swap transactions, under which the priority changed from swap counterparty (ie Lehman) priority to noteholder priority on the insolvency of the Lehman entities (litigation which began under the title Perpetual Trustee Company Limited v BNY Corporate Trustee Services Limited), has finally come to an end with a Supreme Court decision under the title Belmont Park Investment PTY Limited v BNY Corporate Trustees Services Limited and Lehman Brothers Special Financing Inc (2011 UKSC 38). The Supreme Court has now ruled that the flip provisions do not infringe the anti-deprivation rule and are valid under English law.

For brief further details of this decision please click here.