Almost 12 years after the commencement of the Lehman Brothers bankruptcy case, we now know the answer to one of that case’s most interesting questions—namely, whether so-called “flip clauses” are protected settlement payments or void as ipso facto bankruptcy provisions.

On August 11, 2020, the US Court of Appeals for the Second Circuit (Court) issued a decision in the closely followed case of Lehman Brothers Special Financing Inc. v. Bank of America N.A., 18-1079, which raised this question in the context of synthetic collateralized debt obligations (SCDOs).


Continue Reading Second Circuit: Lehman Brothers “Flip Clause” Payments Are Protected Settlement Payments and Not Void as Ipso Facto Bankruptcy Provisions

The Wall Street Journal recently quoted Mayer Brown Partner Matthew F. Kluchenek regarding a federal judge’s demand that the new chairman and two commissioners of the Commodity Futures Trading Commission (“CFTC”) testify in response to a motion for contempt and sanctions. U.S. District Court for the Northern District of Illinois Judge John Robert Blakey ordered CFTC Chairman Heath Tarbert to testify about agency statements regarding a $16 million consent order (“Consent Order”)[1] with Kraft Foods Group Inc. and Mondelez Global LLC (“Kraft and Mondelez”) to settle a 2015 complaint that alleged wheat market manipulation.[2]

Continue Reading Federal judge orders CFTC commissioners to testify about public statements following the issuance of a consent order in CFTC v. Kraft