Lehman Brothers entities have appealed a Federal Court ruling giving local councils the right to pursue the failed investment firm over their investment losses.

A High Court spokesman last week confirmed Lehman Brothers Inc and Lehman Brothers Asia have both filed special leave to appeal the ruling in line with expectations.

Last month the Federal Court ruled against the validity of a deed of company arrangement that had blocked the councils from chasing claims against Lehman.

Many councils, including WA’s Swan Council and NSW shires Parkes and Wingecarribee, lost millions after investing in collateralised debt obligations arranged by the firm. They are pursuing payment under various Lehman insurance policies.

Local councils launched legal action after they were deemed “contingent creditors” under the deed, with an offer of between 2-13 cents in the dollar, against 47.8-100 cents for related-party creditors.