Thursday, April 1, 2010

Lehman Brothers v City of Swan

Lehman Brothers Holdings Inc v City of Swan & Ors [2010] HCATrans 82
[UPDATE 14/4/10: The reasons are now published.]
Lehman Brothers were a major player in providing the financial products that led to the Subprime Mortgage Crisis. Among those hardest hit by the Crisis were Australian local councils. In dealing with the claims against Lehman Brothers a Deed of Company Arrangement was approved by a majority of creditors, which provided for the Councils to take less than 10 cents in the dollar. However many of those voting in favour of the DOCA were reportedly overseas Lehman interests and the Councils have claimed that the DOCA was unfair to their interests.

The High Court has found in favour of the Councils and has confirmed an order that the DOCA be set aside. As with Republic of Croatia v Snedden that I posted about yesterday they have reserved their reasons but the transcript shows the following orders:

FRENCH CJ: These appeals from the Full Court of the Federal Court of Australia were heard on 9 and 10 February 2010 by a Court constituted by Justices Gummow, Hayne, Heydon, Kiefel and myself. The Court would dismiss the appeals. The orders of the Court are:

In matter No S1 of 2010:

Appeal dismissed.

The appellant pay the costs of the first, second and third respondents.

In matter No S362 of 2009:

Appeal dismissed.

The appellant pay the costs of the first, second and third respondents.
I publish those orders.

The reasons for the Court’s orders will be delivered at a later date.

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