Lehman Motion On Open Bank Loan Trades

November 19, 2008

On November 14, Lehman Brothers Holding Inc. and Lehman Commercial Paper Inc. (the “Debtors”) filed a motion (the “Motion”) with the Bankruptcy Court seeking permission to assume and perform certain open bank loan trades and to reject (not perform) other bank loan trades.

In addition to this basic relief, the Debtors seek (i) a finding that no cure payment is due to their counterparty in connection with trades that they wish to assume and perform, and (ii) an order that the counterparty be prohibited from asserting a setoff right where the Debtors reject one trade with, and assume another with, the same counterparty (i.e., cherrypick).

The deadline to file objections to the Motion is November 28, 2008 and the hearing is December 3, 2008.

In our view, colorable grounds exist to object to the Motion’s request for a determination that counterparties not be permitted to exercise setoff rights. We also believe that clarification is needed regarding the request for a finding that no cure payment is needed.

Should you have any questions about any of the foregoing or wish that we file an objection on your behalf, please contact one of the attorneys listed below.