Lehman Brothers Holdings Inc. has settled a closely watched derivatives fight with the special purpose vehicles behind a pair of failed collateralized debt obligations called Liberty Square, Dow Jones Daily Bankruptcy Review reported today. Bankruptcy Judge James Peck approved the settlement between Lehman's financial products unit and special purpose vehicles (SPVs) behind Liberty Square CDO I and II. Lehman and the SPVs had been fighting over some $15 million in collateral held in an account at Bank of New York Mellon Trust Co., which served as the trustee in the deal, that the failed investment bank said that it was due under now-terminated interest rate swaps.
