Pearson & Ors v Lehman Brothers Finance S.A.  EWCA Civ 1544 Shortly before Christmas, the Court of Appeal in London handed down judgement in favour of the administrators of Lehman Brothers International Europe (LBIE) in what is known as the "Rascals" case.1 In so doing the Court, whose judgement was given by Lord Justice Lloyd, upheld Mr Justice Briggs' finding at first instance2 resolving an intra-group dispute over the beneficial ownership of securities worth in excess of $1.5 billion.3 The outcome is of immediate interest to creditors of LBIE and the unsuccessful appellant, Lehman Brothers Finance S.A. (LBF), a Swiss subsidiary also subject to insolvency procedures. Two other appellants settled with the company's administrators prior to the appeal. While Lloyd LJ upheld the judge's decision in most respects, he differed in certain key matters in his reasoning. The decision is also of note because of the Court's approach to Lehman's global settlement practice for securities acquired in the market (or the "street" as referred to in the judgment), and the effect of recurring back-to-back repos and stock loans.
Giving Effect to Rascals
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