Lehman International administrators concerned about ISDA payments

By Caroline Salls

Pittsburgh, June 23 - Lehman Brothers International Europe's joint administrators are concerned that some ISDA master agreement counterparties may choose not to close out their master agreement transactions and avoid making payments due to the company, according to a company news release.

According to the release, the master agreement allows non-defaulting parties to choose not to make the payments to a defaulting party.

As a result, the administrators said they are worried that some of the parties may not close their transactions "for a long period or indefinitely."

The joint administrators have applied to the High Court for direction on the meaning of the master agreement provision in question.

New York-based Lehman Brothers Holdings Inc. was the fourth-largest investment bank in the United States. The company filed for bankruptcy on Sept. 15, 2008 in the U.S. Bankruptcy Court for the Southern District of New York. Its Chapter 11 case number is 08-13555.

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