01 Feb 2012
The Power Sector Assets and Liabilities Management (PSALM) Corporation has engaged the services of Pinsent Masons as legal counsel for its USD3.4-million claim against Lehman Brothers Special Financing, Inc. (LBSF) following a successfully concluded negotiated bidding, according to PSALM President and Chief Executive Officer Emmanuel R. Ledesma Jr.
PSALM made the announcement after it issued the Notice of Award to Pinsent Masons for the consultancy service on 31 January 2012. PSALM conducted negotiated procurement after the project underwent two failed biddings.
PSALM disclosed that six (6) interested parties, composed of international and local law firms, submitted proposals last 24 January 2012. Two (2) bidders were disqualified due to late submission and one (1) bidder failed to meet the technical qualifications. Among those who passed both the technical and financial requirements, Pinsent Masons submitted the lowest financial bid. Its financial offer was eventually declared by PSALM as the Lowest Calculated and Responsive Bid.
Pinsent Masons's original bid of PhP18.63 million (PhP18,633,033.00, or USD431,820.00, based on the Bangko Sentral ng Pilipinas's reference rate of PhP43.15:USD1 as of 25 January 2012) was lowered to PhP18.33 million (PhP18,331,846.00, or USD424,840.00) after further negotiations.
Pinsent Masons is an international law firm that provides a wide range of commercial legal advice and support services in specific market sectors, such as banking, energy, and insurance. The law firm operates in the United Kingdom, the Gulf, and the Asia-Pacific region. It has significant experience in hedging and other derivative transactions using International Swaps and Derivatives Association, Inc. (ISDA) documentation and has handled various bankruptcy litigation cases in New York.
Ledesma reiterated that PSALM did not incur losses from the USD100-million Principal-Only-Swap (POS) hedging transaction it entered into with LBSF in 2007.
When LBSF went bankrupt in 2008, PSALM immediately invoked the ISDA agreement, terminated the transaction on 03 November 2008, and replaced it with a new POS with the same terms and conditions.
"The replacement ensures the continuous protection of PSALM's transaction that it initially made with Lehman Brothers," Ledesma said. "The value of the Lehman swap that was replaced may now be sold in the derivatives market for up to approximately USD12.85 million as of November 2011."
Pinsent Masons will provide legal services to facilitate the claims filed by PSALM before the New York bankruptcy court representing the cost of the replacement and other expenses (such as legal fees and damages) as may be allowed under the provisions of the ISDA.
Strategic Communications and Partnership Division |