Lehman argues that a provision in numerous credit default swap agreements that caused Lehman to lose its priority payment status when it filed for bankruptcy violates the Bankruptcy Code.

This was bound to happen: An activist fund is demanding that companies reconsider--under threat of derivative suits--the pay packages they've bestowed on their executives.

Regular Citi litigation counsel Paul Weiss doesn't like to sue other banks, so Citi has tapped Greg Joseph, whom it previously called upon in the litigation over its aborted Wachovia deal. But Morgan Stanley's defense counsel in Citi's swap suit is the real surprise: Quinn Emanuel.

A judge in Washington ruled that the SEC doesn't have to restore purged files relating to investigations the agency supposedly flubbed, including probes of Bernie Madoff, Lehman Brothers, and Bank of America.