double lug terminal @ sub

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mayjong

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hey all-
08 NEC, existing 400A main with 2 @ 200A "challenger" subs.
HO wants to remove the main lug at the bottom of one of the subs and install a double lug.
from that, run wire to "another" 200A panel.
assuming load calcs out (we will require this)- is it an acceptable install to use a double lug (junction?)
to feed a panel and junction to another? i can't see why not...
see (terrible) pic!

thanks!double lug.jpg
 
Not seeing the whole picture, but if this existing sub doesn't have a main breaker how is it fed from a 400 amp main? a panel is required to be protected at its rating 408.36 so each sub panel will require a OCPD ahead of it.

What size conductors come from the 400 main to this sub panel?

Here it is very common to have a 320 meter with double lugs that feed two 200 amp main breaker panels,
 
thanks
i haven't seen the install, but HO assures there are two @200A discos at the main. also have not verified wire size yet. will need size/distance for that. very preliminary.

thanks again
 
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