With the June 30, 2023 cessation of USD LIBOR fast approaching, a large majority of outstanding trades have already been transitioned – voluntarily or through mandatory clearinghouse conversions – to the Secured Overnight Financing Rate (SOFR). However, despite industry efforts and legislation to address contracts that lack transition paths, numerous contracts remain outstanding and likely will continue to reference USD LIBOR beyond June 2023.
In a new article for Law360, Brattle Principal Ioannis Gkatzimas, Senior Associate Ryan Leary, and Research Analyst Musa Isani discuss how these outstanding contracts could be the subject of potential legal disputes, including in circumstances where contracting parties have differing preferences for which reference rate should replace USD LIBOR. The authors explore the challenges associated with contracts lacking clear transition paths and the different types of disputes that could arise, and detail how expert economic analysis will be invaluable in helping litigators and their clients navigate such conflicts. The article is related to a Brattle white paper published by the authors, “From USD to LIBOR: A Look at LIBOR’s Exit, SOFR’s Ascendance, Emerging Alternatives, and Economic Considerations for Litigation.”
The article, “Economic Considerations for Potential Litigation in the USD LIBOR Transition,” is available below.