“Insolvency Doesn’t Justify Rewriting Agreement to Weaken Creditor’s Rights”
Chicago Daily Law Bulletin 11/02/15 By Christopher Combest and Faye B. Feinstein
Below is an excerpt:
In history’s largest Chapter 11 case, a U.S. District Court has delivered a victory to the secured lender whom Lehman Brothers Holdings Inc. had accused of illegally accelerating its fall by squeezing billions of dollars of collateral out of the teetering investment bank shortly before it toppled into bankruptcy.
By substantially granting the lender’s motion for summary judgment on Lehman’s complaint in Lehman Brothers Holdings Inc. v. JP Morgan Chase Bank, N.A., No. 11-cv-6760, 2015 WL 5828216 (S.D.N.Y. Sept. 30, 2015), the court vindicated a fundamental premise of debtor-creditor relations: Sophisticated parties will be held to their agreements, and parties do not violate those agreements by enforcing them aggressively, even harshly, to protect their own interests.
Originally published in Chicago Daily Law Bulletin, November 2, 2015