Claims Under TBA Contracts Do Not Qualify as Customers’ Claims in Broker-Dealers’ Liquidation

December 19, 2011
Judge James M. Peck of the United States Bankruptcy Court for the Southern District of New York recently issued an opinion on a motion of the Lehman Brothers Inc. trustee to confirm his determination that certain claims relating to settled on delivery-versus-payment “to be announced” contracts do not qualify as customer claims against the LBI estate, and therefore are not entitled to Securities Investor Protection Act coverage. This updated analyzes the court’s decision, which is the first known decision in the United States to address these issues.