Good Faith, Flawed Assets and the Emasculation of the UK Anti‐Deprivation Rule

The Supreme Court's unanimous decision in B elmont P ark I nvestments P ty L td v BNY C orporate T rustee S ervices L td and L ehman B rothers S pecial F inancing I nc is of major significance to lenders, especially those in the global structured finance market. This case confirms the validity of commonly used insolvency‐triggered secured‐priority flip clauses, and, more generally, suggests a dramatically reduced role for the common law anti‐deprivation principle. The decision may not fully resolve market uncertainty, however, given the particular analysis adopted in the case itself (analysed here) and its divergence from the US statutory approach to the same principle.