For
Immediate Release Wednesday, May 2, 2007
For More Information, Please Contact:
Scott Marra, ISDA New York, 212-901-6013,
smarra@isda.org
ISDA and FMLG
Submit Joint Amicus Brief in Support of
Bear Stearns’
Appeal vs. Chapter 11 Trustee Helen Gredd
NEW YORK, Wednesday, May 2, 2007 – The International Swaps and Derivatives Association, Inc. (ISDA) and the Financial Markets Lawyers Group (FMLG) this week sought leave to file a joint amicus brief supporting Bear Stearns’ appeal of the decision by the United States Bankruptcy Court for the Southern District of New York, dated January 9, 2007, in favor of Helen Gredd, as Chapter 11 Trustee for the Manhattan Investment Fund Ltd.
The appeal is from a decision holding Bear Stearns liable under fraudulent transfer law to creditors of the Manhattan Investment Fund for approximately $125 million that the Fund deposited into the Fund’s own Bear Stearns brokerage account, and subsequently lost in the stock market, during the year prior to the Fund’s bankruptcy filing.
ISDA and FMLG have come before the Court as amici curiae because they believe that the imposition of fraudulent transfer liability on financial intermediaries, such as Bear Stearns, would extend the reach of fraudulent transfer law far beyond its established limits and, as a result, would endanger the health and efficient operation of financial markets, including the derivatives, foreign exchange and swaps markets.
The amicus brief, filed on behalf of ISDA and FMLG by Wachtell, Lipton, Rosen & Katz, should be of assistance to the District Court in deciding the issues on appeal, given both the critical importance of the legal issues presented and the potentially vast negative consequences of the Bankruptcy Court’s decision. As explained in the amicus brief, ISDA and FMLG ask the District Court to rule that a financial intermediary such as Bear Stearns is not properly subject to liability for a fraudulent transfer under the Bankruptcy Code.
About ISDA
ISDA, which represents participants in the privately negotiated derivatives industry, is among the world’s largest global financial trade associations as measured by number of member firms. ISDA was chartered in 1985, and today has approximately 780 member institutions from 54 countries on six continents. These members include most of the world's major institutions that deal in privately negotiated derivatives, as well as many of the businesses, governmental entities and other end users that rely on over-the-counter derivatives to manage efficiently the financial market risks inherent in their core economic activities. Information about ISDA and its activities is available on the Association's web site: www.isda.org.
The Financial Markets Lawyers
Group advises on legal issues relevant to over-the-counter foreign exchange and
other financial markets. The FMLG is comprised of lawyers who support foreign
exchange and other financial markets trading in leading worldwide financial
institutions. FMLG is sponsored by but independent of the Federal Reserve Bank
of