Clifford Chance

Perpetual litigation comes to an end

27 July 2011

On 27 July, the Supreme Court handed down its long awaited judgment in the case Belmont Park Investments PTY Limited -v- BNY Corporate Trustee Services Limited and Lehman Brothers Special Financing Inc (LBSF). Although there were no surprises – the decision essentially follows the Court of Appeal's view that "flip provisions" reversing a counterparty's priority in the payment waterfall are not contrary to the anti-deprivation principle, and did not deprive LBSF's insolvent estate of an asset – it does, however, provide some much needed clarity for those operating in the financial markets on the limits of the anti-deprivation principle.

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