WINGECARRIBEE Council might lose any chance at compensation from Lehman Brother's Australia after the failed bank was reported as seeking bankruptcy protection under US law.
The council invested $32 million in failed CDOs back in 2007, alleging it was misled or given conflicted advice from "rogue" traders.
It is one of a number of investors suing Lehman Australia totalling about $1.3 billion in claims.
If recognised by a US judge, the bankruptcy filing could halt lawsuits and stop creditors from seizing the company's assets, in the US.
The company is embarking on a $64 billion liquidation plan after more than three years in bankruptcy court.
It has raised more the $20 billion in cash so far.
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