Lehman Bros. Special Financing v. Ballyrock ABS CDO 2007-1 Ltd. (In Re Lehman Bros. Holdings)

MEMORANDUM DECISION GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS BY DEFENDANT BALLYROCK ABS CDO 2007-1 LIMITED

JAMES M. PECK, Bankruptcy Judge.

Introduction

This decision addresses a motion to dismiss filed by defendant Ballyrock ABS CDO 2007-1 Limited (“Ballyrock”) in an adversary proceeding commenced by Lehman Brothers Special Financing Inc. (“LBSF”) —Lehman Bros. Special Fin. Inc. v. Ballyrock ABS CDO 2007-1 Ltd. et al. (Adv. Pro. No. 09-01032) (the “Adversary Proceeding ”).

The Adversary Proceeding raises questions relating to the enforceability in bankruptcy of a contractual…