CDO vehicle fights trustee legal bill, reports the Australian
The Australian newspaper reported today on actions taken by Perpetual Trustee against Mahogany the vehicle through which two CDOs are listed on the Australian stock exchange
I wonder if Perpetual thought of asking Lehman to unwind, instead of going the legal route... Maybe they could have saved the $1.7mm (which is an astronomical amount for this). As usual, the bankruptcy lawyers gain the most.
Looks like Perpetual hasn't thought this through very well. The court cases will almost certainly take more than a few months to reach a resolution and before then they'll either have to reverse their stance and give monies back to Mahogany to keep it going or put it into bankruptcy when presumably they'll have to assume all its duties and deal with the retail investors directly themselves.
Events like these will only make future structured deals more difficult to get rated. They justify the doomsday scenarios that rating agency analysts dream up but were usually accepted,prior to 2007, as extreme and unlikely events. Not that there are all these investors eager to buy collateralised CSOs now anyway.
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Comment by: Anonymous. Posted 14 years ago [2009-10-22 22:27:30]