ABA Section of Business Law
eSource
Manhattan Federal Court Enforces 'Clear' Terms of Credit Default Swap Contract
- This article considers the decision of Judge Barbara Jones of the Southern District of New York on November 5, 2008 in VCG Special Opportunities Fund v. Citibank, N.A., Docket No. 08-CV-01563, finding that Citibank N.A. (Citibank)—the credit protection buyer under a credit default swap (CDS)—was entitled to certain payments from the credit protection seller, VCG Special Opportunities Master Fund Limited (VCG), and granting Citibank judgment on the pleadings. The decision reinforces the likelihood that courts will strictly construe CDS agreements and uphold them as a matter of law.
