By Angela Dorizas

The Federal Court has upheld an appeal by the administrators of Lehman Brothers Australia to block Wingecarribee Shire Council’s access to the company’s insurance documents.

The council has been involved in a legal battle with the failed bank since 2007, in an attempt to recoup losses made through investing in collateralised debt obligations (CDOs) under the advice of Lehman Brothers’ subsidiary, Grange Securities.

In recent proceedings, the council sought access to Lehman Brothers’ insurance policies to uncover other targets for litigation.
 
The Federal Court ruled that the company’s insurance documents were to be produced and costs awarded in the council’s favour. Lehman Brothers filed to appeal the decision and the matter was heard before three judges yesterday.

After hearing complex legal argument, the judges upheld the appeal, effectively blocking Wingecarribee’s access to the insurance documents.

Wingecarribee Mayor Duncan Gair said the ruling was “an enormous disappointment”, but was unlikely to have any major implications for the second creditors meeting.

Related Story: Win to Wingecarribee in battle against Lehman Brothers