Lehman Preferred Series "J" Preferred (fka LEHJQ)

[coach tequila]

I wrote this in response to a question on the Yahoo board...thought you might like to read it. As always your thoughts are welcome...



A great majority of the derivatives/swaps contracts have been "terminated" by Lehman counterparties. The challenge/opportunity for Lehman is very few of the "terminations" have been verified, priced, and ageed upon per the MSDA agreements.

The Metavante court decision has the potential to set a tremendous precedent. It was decided and is once again back in court today!

Metavante thought that just because Lehman went into Chap 11 that was grounds for default, automatic termination and that Metavante did not owe millions of dollars to Lehman. So they ignored doing anything.

Metavante found out that counterparties still have to follow certain procedures in order to "terminate" a position. Just filing a Chap 11 BK does not necessarily mean counterparties can walk away or confiscate collateral at whatever price the counterparty feels appropriate. There is still alot more meat on the bone here. Know one knows how it will turn out.

However, it leaves the door open for Lehman to go back and negotiate settlements that counterparties previously thought were terminated unilaterally upon filing BK!

Coach T