Here's somebody who had a front row seat. Charles
^^^ From: "David Chris Burford writes about credit default swaps below: I thought I would share that in my capacity as a bankruptcy lawyer, I listened to today's hearing in the Lehman bankruptcy case, which included an extensive report to the Judge. We represent three different entities who were counter-parties to Lehman on either credit default swaps or power trades. When Lehman filed, most of the counter-parties terminated all contracts and then netted them out. If you determined you were owed money, you sent a demand letter. If you owed money, you did nothing. Lehman reported today that it is a party to about 1.5 million derivative transactions with over 8,000 counter-parties. The immediate problem counter-parties have is that they provided collateral for the transactions and nobody knows where the collateral is. Lehman doesn't really know because substantially all of the employees with institutional knowledge transferred to Barclays when the brokerage unit was sold. Lehman has hired Alvarez & Marsal (probably the largest provider of financial restructuring services in the world) to staff old Lehman, but it is going to take at least 45-60 days for them to get a handle on the data to provide any information. And once they do get up to speed, they are going to have to go out and hire people with expertise to evaluate all of the swap transactions to reconcile them. Quite the mess and very challenging issues for bankruptcy lawyers and the bankruptcy system. David Shemano Chris Burford writes about credit default swaps below: I thought I would share that in my capcaity as a bankruptcy lawyer, I listened to today's hearing in the Lehman bankruptcy case, which included an extensive report to the Judge. We represent three different entities who were counter-parties to Lehman on either credit default swaps or power trades. When Lehman filed, most of the counter-parties terminated all contracts and then netted them out. If you determined you were owed money, you sent a demand letter. If you owed money, you did nothing. Lehman reported today that it is a party to about 1.5 million derivative transactions with over 8,000 counter-parties. The immediate problem counter-parties have is that they provided collateral for the transactions and nobody knows where the collateral is. Lehman doesn't really know because substantially all of the employees with institutional knowledge transferred to Barclays when the brokerage unit was sold. Lehman has hired Alvarez & Marsal (probably the largest provider of financial restructuring services in the world) to staff old Lehman, but it is going to take at least 45-60 days for them to get a handle on the data to provide any information. And once they do get up to speed, they are going to have to go out and hire people with expertise to evaluate all of the swap transactions to reconcile them. Quite the mess and very challenging issues for bankruptcy lawyers and the bankruptcy system. David This message has been scanned for malware by SurfControl plc. www.surfcontrol.com _______________________________________________ Marxism-Thaxis mailing list [email protected] To change your options or unsubscribe go to: http://lists.econ.utah.edu/mailman/listinfo/marxism-thaxis
