The WLR Daily case summaries
[2022] WLR(D) 407
Chancery Division
In re Lehman Brothers International (Europe) Ltd (in administration)
Grant and others v FR Acquisitions Corporation (Europe) Ltd and another
[2022] EWHC 2532 (Ch)
2021 Jan 13, 14; 2022 Oct 11
Hildyard J
Contract— Construction— Derivative agreements— Bank entering into administration giving rise to event of default under swap transactions— Event of default entitling bank’s counterparties to suspend payment obligations while event “continuing”— Administrators concluding substantial surplus likely to remain in estate after payment of debts and promulgating scheme of arrangement to compromise outstanding legal proceedings— Scheme receiving court’s sanction in England and recognition in United States of America— Administrators preparing to finalise administration and return bank to directors’ control as going concern— Whether because of permanent alteration of creditors’ rights administration “continuing” for purposes of suspensory provision even after termination of administrators’ appointment— Whether scheme promulgated by administrators “arrangement” and therefore event of default separate from administration— Whether foreign recognition of scheme “arrangement”— Whether following discharge of administration suspensory provision falling away and counterparties obliged to pay bank sums owing under swaps—
ISDA 1992 Master Agreement (Multicurrency – Cross Border), ss 2(a)(iii), 5(a)(vii)
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ISDA 2002 Master Agreement (Multicurrency – Cross Border), ss 2(a)(iii)i, 5(a)(vii)