Korea Investment & Securities Versus Lehman Brothers International



Just today, the attempts by Korea Investment & Securities (KIS) to accrue payment from Lehman Brothers International vis-à-vis the company's purchase of credit-linked notes (CLN’s) which are securities that have embedded credit default swaps enabling the issuer to transfer a credit risk to credit investors, four and a half years ago, were dismissed.  A few weeks ago the court dismissed TrueFriend’s claim (a KIS assignee) against Lehman Brothers International Europe (LBIE) which tried to recover $1314 million in loss on these CLN’s from November 2006.


This particular case is KIS’s purchase of CLNs from Lehman Brothers Treasure Co. a few years ago.  Some months later TrueFriend was set up by KIS, which it used to transfer/sell the CLN to.  A year and a half later following Lehman Brothers’ bankruptcy, TrueFriend no longer received any more payments, claiming LBIE to be the “de facto issuer,” not the LBTC.


Today, Mike Jervis (PriceWaterhouseCoopers partner in London) said, “The administrators welcome the court’s judgment, which will now enable them to continue with the orderly wind-down of LBIE and return of assets to creditors in a timely fashion.”


There is some talk that KIS will appeal the decision but Jarvis remains hopeful for KIS as the CLN “remains a valid claim in bankruptcy against LBTC and LBHI.


Medical Innovation Moving To Emerging Economies

A PricewaterhouseCoopers report indicates that emerging countries like Brazil, India and China are emerging as leaders in medical innovation and may well surpass the U.S.

According to the report, medical technology innovators are more frequently going overseas to “seek clinical data, new-product registration and first revenue.” This may lead to a situation where Americans are the last to receive new medical technology. Emerging markets are quickly becoming “the leading markets for smaller, faster, more affordable devices that enable delivery of care anywhere and help bend the health-care cost curve downward.”

According to the report, the emerging nations are not hindered by “entrenched health-care system infrastructure that seeks to maintain the status quo.” The report’s co-author, a managing director at PwC, Christopher Wasden, said that it is important to “rethink our reimbursement system” to the medical tech industry. This may stimulate companies to stay in America.