Flip clause ruling nets Lehman estate $3 billion

The US judge who voided the flip clauses in Lehman CLNs says the failed bank's estate has used the ruling to recoup $3 billion from creditors. But he warns that legal uncertainty about the decision remains

Litigation between the Lehman estate and other counterparties is still ongoing

The judge who presided in the landmark Lehman Brothers bankruptcy case – and ruled that a controversial clause in credit derivatives contracts that would have given creditors priority in termination payments was invalid – says the use of his ruling in non-public mediations has allowed the bank's estate to recoup $3 billion from creditors.

"Hundreds of mediations have taken place [with] Lehman. I am not privy to what happened in those mediations, but I am privy to the results of those mediations