Replies to post #115797 on Lehman Brothers Financial SA (LEHNQ)

[JERSEYHAWG]

And while we wait we have football. 
I pick Rams, Patriots. Denver lost the quarterback. 
Football is more tangible than Lehman for the time being. 
Hi to all. Heavy snow here currently. Be well. Be safe folks. 
We still got a shot. 

[cottonisking]

AI, we need to show the World that they have a 'New BOSS':

The U.S. court deferred the claims adjudication to the Swiss home court due to principles of international cooperation in insolvency proceedings and because the validity of the claim's calculation was an issue better suited for resolution under the applicable Swiss law. The court determined that while Enasarco's calculation was submitted late, the delay did not automatically invalidate the underlying claim.
Reasoning for Deferring the Claim
Principle of International Cooperation: U.S. courts generally seek to cooperate with primary foreign insolvency proceedings (in this case, in Switzerland) to ensure an orderly and efficient resolution of claims globally. The U.S. court recognized that the Swiss court was the proper venue to administer the insolvency estate and adjudicate the claims within it.
Validity of the Underlying Claim: The U.S. court found that the failure to provide the loss calculation by the specified deadline did not, in itself, invalidate the claim's calculation under the terms of the ISDA Master Agreement. The court concluded that the loss had been validly calculated and that the delay did not affect its fundamental validity.
Adjudication in the Home Jurisdiction: The U.S. court determined that the Swiss court was the most appropriate forum to rule on the specific application of its own procedural rules, including the impact of the missed deadline within the context of the overall insolvency process. This approach prevents parallel litigation and potential conflicting rulings across different jurisdictions.
Swiss 20-Day Rule
The Swiss legal system has various strict deadlines, and courts generally apply them with little lenience; however, these deadlines can vary depending on the specific legal context (e.g., appealing an arbitration award vs. contesting a claim in bankruptcy). The court's decision in the Enasarco case focused on the nature of the underlying claim's validity rather than just the procedural deadline.
There is no indication that the Swiss insolvency law changed its 20-day rule as a direct result of the Enasarco case. Swiss courts typically apply their rules strictly, but the U.S. court's decision was based on deferring the interpretation and application of these rules in an ongoing insolvency proceeding to the home Swiss court. The U.S. court's role was one of international recognition and cooperation, not re-interpreting Swiss procedural law. The allowed amount of the claim was determined by the final outcome of the litigation in Switzerland.

AI Overview



+10
Based on the legal principles of international comity and insolvency law, a U.S. court would likely defer Enasarco’s claim to a Swiss home court, despite potential procedural violations like a 20-day deadline, because the primary goal of insolvency proceedings is the equitable treatment of all creditors under a single, unified administration.
Here is why the claim was likely sent back, and how the Swiss insolvency process affects deadlines:
1. Why Send the Claim Back (International Comity)
The "Home Court" Principle: When a company (like Lehman Brothers Finance, in the context of the Enasarco case) is undergoing insolvency in its home country (Switzerland), U.S. courts typically defer to that forum to prevent "piecemeal" litigation and ensure that one creditor does not get an unfair advantage over others.
Discretionary Deference: The U.S. court exercises its discretion to honor foreign insolvency proceedings (international comity), even if U.S. procedural rules were not strictly followed in that foreign jurisdiction.
Validity of the Claim: The 20-day rule violation is a matter for the Swiss court to determine, not the U.S. court. If the Swiss court allows the claim despite the delay, the U.S. court will respect that decision.
2. Did Swiss Insolvency Change the "20 Day Rule"?
Swiss insolvency law does not necessarily "change" a contractual 20-day deadline, but it does alter how deadlines are managed:
Equitable Treatment: The 20-day rule mentioned in Swiss insolvency context (e.g., submitting claims or creditors' meetings) is to establish the bankruptcy estate.
Flexibility in Claims: While strict deadlines exist, the Swiss bankruptcy administration (or the overseeing court) has the authority to assess whether a claim is valid, taking into account the circumstances of the bankruptcy, such as the complexity of calculating derivative losses.
Procedural Discretion: If a claim was filed, even if late, the Swiss liquidator or court must review it. The 20-day rule is meant to speed up the process, not necessarily to permanently extinguish claims without consideration, especially in complex, cross-border insolvencies.
In essence, the U.S. court prioritized a unified, fair, and orderly insolvency process under Swiss law over a strict application of a procedural deadline, leaving the final decision on timeliness to the Swiss authorities who are handling the entire estate.