This paper will explore the different steps market participants should take to make sure they are prepared when LIBOR is phased out in December 2021. Part I will focus on the actions market participants should do before going into negotiations that can increase their potential to reach a consensual agreement. Part II will explore what financial firms should be prepared for during the negotiation process and what claims may arise when no agreement is reached. The decision for how to handle any LIBOR-linked financial instrument in their portfolio should be left to the discretion of market participants themselves. This paper does not set out to make that decision, but it will communicate the urgency with which firms should act to either reach a consensual agreement or prepare for the legal risk and litigation costs of DEFCON 1.
John M. Neubert,
LIBOR Phaseout: Litigation is Coming,
Mich. Bus. & Entrepreneurial L. Rev.
Available at: https://repository.law.umich.edu/mbelr/vol10/iss1/6