Lehman Brothers vs. JPMorgan Conflicts with Safe Harbor Law

Bankruptcy Lawyers of Lehman Brothers may face difficulties as on April 19, 2012, JPMorgan Chase & Co., won dismissal of some of Lehman’s claims over $8.6 billion it wants back.

US. Bankruptcy Judge James Peck cited that Lehman cannot claim various sums transferred to JPMorgan, since it is governed by the so-called safe harbor law, which is devised to protect large banks against weak companies.

According to the suit, Lehman claimed that the New York-based lender helped coordinated its collapse, since 2008, by demanding $8.6 billion in collateral, a big amount which devastated the company’s finances. 

Further allegations include inside job issues, as Lehman claimed that JPMorgan grabbed assets for itself at a critical time in its banking relationship with the company, according to the plaintiff’s Bankruptcy Lawyer.

While JPMorgan tries to move the case to a district judge, saying it raises legal issues beyond the jurisdiction of a bankruptcy judge. Lehman denied the move, proclaiming that Peck can’t rule on Lehman’s allegation that JPMorgan caused monetary damage to failing Lehman in 2008, the bank has said. Furthermore, the company firmly stated that the suit confines itself to bankruptcy matters.

As debates are ongoing for both sides on whether which court has the right to the case, U.S. District Judge Richard Sullivan in New York is “working on” a decision on whether Lehman’s suit belongs in district court, according to court papers. Peck should rule first on JPMorgan’s move to dismiss the case, Sullivan told both sides, according to a transcript of a Dec. 30 court session.

Well Bankruptcy Lawyers would find it very interesting on whether the case would develop further or stay on debates. But, regarding the impact of the suit, this would probably reach the international economy as one of the largest companies makes battle with the number 1 bank of America.

Company history

Lehman Brothers Holdings Inc. was a global financial services firm. Before declaring bankruptcy in 2008, Lehman was the fourth largest investment bank in the USA doing business in banking, investment equity and fixed-income sales and trading, research, investment management, private equity, and private banking.

On September 15, 2008, the firm filed for Chapter 11 bankruptcy protection following the massive exodus of most of its clients, drastic losses in its stock, and devaluation of its assets by credit rating agencies. “The filing marked the largest bankruptcy in U.S. history, and is thought to have played a major role in the unfolding of the late-2000s global financial crisis”, says a district Bankruptcy Lawyer.

Dodgers Sale Expected to Improve Performance – Bankruptcy Lawyer

Bankruptcy Lawyers had their work cut, when the long feud over the Los Angeles Dodgers finally reached its conclusion.

On April 14 Saturday, marking the end of the long stalemate, the sale of the Los Angeles Dodgers has been officially approved by a federal bankruptcy judge in Delaware, ending the strife between owner Frank McCourt and the MLB.

Bankruptcy Judge Kevin Gross said late Friday, “Guggenheim Baseball had met all of the requirements for the $2.1 billion acquisition” and officially sealed the transaction.

"We are pleased to have successfully concluded the Chapter 11 reorganization process," the Dodgers said in a written statement. "All the organization's goals in the reorganization cases have been achieved. We look forward to returning all of our attention to Dodger baseball."

Fans of the team has shown overwhelming support in favor of the sale, as this marks the reversal of the team’s financial difficulties as well as ordinary performance on the field in recent years. Bankruptcy Lawyers were even optimistic that finances would be high with the change of management. 

Guggenheim Baseball is led by CEO Mark Walter along with former Los Angeles Lakers star Magic Johnson and veteran baseball executive Stan Kasten.

What happened?

The decline began when owners Frank and Jamie McCourt announced that they would be parting on October 14, 2009. This was at the time when the team was experiencing a major drop over performance and was unable to join the playoffs. Shortly after, Jamie was fired as CEO of the team, which led her to file for a divorce. 

On the following year much to the speculation of an unnamed Bankruptcy Lawyer, the judge in the divorce case of the McCourts invalidated the post-nuptial marital property agreement that Frank McCourt had claimed, which provided him with sole ownership of the Dodgers. In the wake of this decision, Frank was finally able to settle by which Jaime was to receive $130 million for her to relinquish her claims over the team.

With a bitter and expensive divorce, coupled with disputes with MLB over TV deals with Fox Sports, unable to finance payroll, the Dodgers entered Chapter 11 Bankruptcy in June 2011.

Arguments continued, as Bankruptcy Lawyers continued pestering the Dodgers to accept bankruptcy financing from MLB. The team and the league eventually reached an agreement last year authorizing the team’s sale and a process to market the media rights to games starting 2014.

“Friday’s hearing helped resolve a number of issues” said of a reputed Bankruptcy Lawyer. “With it, the issues regarding broadcasting interests as well as ownership issues would finally be put to rest.

Firm’s Liquidation Plan Approved by Bankruptcy Attorneys

As the cases surrounding Executive Life Insurance Co. has been dragging for ages, Bankruptcy Attorneys are proud to say that the wait is finally over.

Finally, payees will be able to sit back and rejoice, as their investments (though not in full amounts), would be remitted through a plan initiated by Benjamin Lawsky, New York’s superintendent of financial services. The plan would start with the payout of $900 million in Executive Life’s estate, as well as another $730 million in contributions from state life insurance guaranty associations.

According to a Bankruptcy Attorney, the plan won approval by Nassau County Supreme Court Justice John Galasso, over the objection of a variety of Executive Life payees.

Galasso said it would allow for about 85 percent of the roughly 10,000 payees to receive full payouts on the present value of their annuity benefits.

“While some 15 percent cried in outrage”, said of the Bankruptcy Attorney, “The court cannot apologize for applying the law as it pertains to everyone involved.” With it being reeked of utilitarian principles, the public cannot but wonder that the majority will always win in these situations.

“Simply put, Executive Life does not have enough assets to meet all its obligations,” James Wrynn, the previous New York Insurance superintendent, said at the time. “We have devised a plan that will maximize payments and ensure the fairest possible outcome for everyone.”

History of Problems

New York’s insurance and banking departments merged in October into the Department of Financial Services, under which Lawsky oversees.

Executive Life was seized by New York insurance regulators in 1991, a casualty of the recent junk bond market crash. Its California-based parent filed for bankruptcy protection the same year.

The insurer initially was to be rehabilitated, with policyholders receiving full payouts over time.

“But, the recent economic downturn led regulators to scrap the rehabilitation plan as dollar value led to surprisingly low with rising borrowing costs,” says of a Bankruptcy Attorney.

Galasso said the liquidation plan that replaced it was the best possible outcome for policyholders, but acknowledged some of them will still have to cope with a “diminished financial future”.

Bankruptcy Attorneys are hoping to make ends meet for parties, insurer and payee alike. Finding possible ways to fix the situation as well as reimburse payee investors. But, with the limit on the amount of finance the company has, some payees would therefore have to wait until the situation is neutralized.