Lehman Brothers Financial SA (LEHNQ)

[hestheman]

Joestocks.....understand, the issue here is not the "intracacies" of a swap counterparty/collaterized debt obligations comparison to subordinated debt securities. The issue is unenforceable IPSO subordination provisions. Outside of bankruptcy, the swap counterparties had priority over noteholders....but their contract provided that in a bankruptcy their roles would be "flipped"....making the swap counterparties subordinate to noteholders due to the solitary act of bankruptcy/default. Now....compare CT's situation. Our prospectus clearly states that in a default, Lehman Holdings can not pay any of it's subsidiaries, until the default is cured. However, now we see docs showing us they intend to pay creditors of those subsidiaries. According to Judge Peck's ruling....this cannot be done. That would be a "flip" of priority upon the sole act of bankruptcy. The scenarios are the same Joe...it's pretty simple to understand. Furthermore, we may not be seeing any "court orders" because the situation has already been resolved (section C).