Replies to post #115793 on Lehman Brothers Financial SA (LEHNQ)

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Yes, Enasarco's initial claim against Lehman Brothers Finance SA (LBF) in the Swiss insolvency proceeding was subject to a strict time limit for challenge under Swiss law, and a failure to meet this deadline would result in the loss of rights to pursue that specific claim within the Swiss bankruptcy process.
Here is an explanation of the situation:
The Swiss Legal Requirement
Under the relevant provisions of Swiss debt enforcement and bankruptcy law, a creditor is required to file any challenge to the liquidators' rejection of their claim in the Swiss courts within a very short, mandatory period, specifically 20 days after the publication of the schedule of claims. If this deadline is not met, the creditor loses its right to seek to prove that specific claim in the Swiss bankruptcy of LBF.
Enasarco's Actions and the Conflict of Jurisdictions
Claim Filing and Rejection: The liquidators of LBF, which was in Swiss insolvency proceedings, rejected Enasarco's claim (for approximately $61.5 million at the time) related to a derivative agreement.
Swiss Proceedings Initiated: To preserve its rights, Enasarco did file a claim with the Swiss bankruptcy court on April 22, 2013, challenging the rejection within the required 20-day window.
English Proceedings and Strategy: Enasarco also intended to pursue the substantive contractual issue of loss calculation in the English courts, as the derivative agreement was subject to English law and an exclusive English jurisdiction clause. Enasarco requested a stay of the Swiss proceedings pending the English court's decision on the matter.
The "Elapsed Time" Issue: The issue of "elapsed time" arose in the context of the potential stay and the separate nature of the Swiss and English proceedings. The English High Court ruled that the Swiss proceedings were a matter of insolvency law and thus fell outside the scope of the Lugano Convention's rules on coordinating parallel lawsuits in different jurisdictions. This allowed the English courts to hear the contractual dispute. Crucially, the court noted that Enasarco was compelled to file in the Swiss court within the short deadline merely to preserve its rights in the insolvency, but the substantive matter would be decided in England.
Summary
The Swiss proceeding did not "not accept" the claim due to elapsed time in the sense that Enasarco missed an initial filing deadline. Rather, Enasarco had to act quickly within the strict Swiss time limit to protect its ability to participate in any potential distribution in Switzerland. The "elapsed time" pertained to the timing of the overall, multi-jurisdictional process, where the Swiss courts were focused on the rapid administration of the estate, and the English courts handled the complex, time-consuming determination of the claim's merits, which was a separate, but related, legal battle. The resolution of the underlying claim's value in the English courts then informed the claim amount reserved for Enasarco in the Swiss (and the main LBHI) bankruptcy.

AI Overview


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Based on the legal proceedings surrounding the collapse of Lehman Brothers and subsequent litigation involving Fondazione Enasarco (an Italian pension fund) and Lehman Brothers Finance SA (LBF) in Switzerland, the rejection of the initial claim was due to strict adherence to Swiss insolvency time limits and procedures.
Here is an explanation of the situation:
1. The Core Dispute and Timing (2008–2013)
The Claim: Following the Lehman collapse in September 2008, Enasarco sought to recover funds from a capital-protected note product. These notes were issued by a special purpose vehicle, but the capital protection was provided by LBF, which entered Swiss insolvency proceedings.
Rejection by Liquidators: The Swiss liquidators of LBF (PwC) rejected Enasarco's initial claim.
The 20-Day Rule: Under Swiss insolvency law (DEBA), once a schedule of creditors' claims is published, a creditor has a strict deadline—often 20 days—to challenge the rejection of their claim in court.
The "Elapsed Time" Issue: Enasarco did file a challenge on April 22, 2013, to the Swiss bankruptcy court regarding the rejection. However, the initial rejection by the liquidators was based on the premise that the formal submission of claims and the necessary documentation (specifically regarding the calculation of losses) had not met the required, strict, and time-sensitive procedural milestones set by the Swiss bankruptcy administration.
2. Legal Context: Swiss vs. English Proceedings
Swiss Proceedings (Insolvency): The Swiss proceedings were focused on the formal admission of the claim into the bankruptcy estate. The liquidators applied a strict approach, leading to the rejection.
English Proceedings (Contractual): Because the Derivative Agreement was subject to English law, Enasarco simultaneously sought to prove their loss in English courts.
High Court Ruling (2014): In Enasarco v Lehman Brothers Finance SA & Anor [2014] EWHC 34 (Ch), the High Court held that the Swiss proceedings were indeed insolvency proceedings (excluded from the Lugano Convention), but it allowed the English case to proceed to determine the method of calculation.
3. Conclusion of the Claim (As of 2026)
As of 2026, the status of this claim is intertwined with the finalization of the LBF/LBHI liquidation.
Stipulation with LBHI: While the Swiss claim was rejected for failure to meet initial deadlines, the U.S. Bankruptcy Court for the Southern District of New York noted that the final allowed amount of the Enasarco claim (Class 9A) would be determined based on the outcome of the litigation.
Final Outcome: Despite the initial Swiss rejection, subsequent legal actions and stipulations allowed the claim to be recognized for the purposes of the broader U.S. bankruptcy distribution, albeit it was a heavily contested and long-running dispute.
In summary, the Swiss proceeding did not initially accept the claim because Enasarco was deemed to have missed the strict, formal, and timely deadlines required to challenge the liquidator's rejection under Swiss bankruptcy law.