Lehman Brothers Financial SA (LEHNQ)

[cottonisking]

All of the LBI asset transfers took place after LBHI filed Chapter 11 and LBI filed Chapter 7. The APA is not valid until the forestated takes place.

This is a mute point? Why? Barclays Capital breached the Asset Purchase agreement (APA) and LBHI picked up the tab to cover any breach under excluded liabilities.

See the Barclays Capital breach below:


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*****lehman-brothers-v.-barclays-capital-adversary-complaint-bankr.-s.d.n.y.-case-no.-09-01731-filed-november-16-2009****


Quote:
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Hearing was in progress and indeed, after it had concluded, and (iii) approximately $2.3 billion
in OCC margin deposits purportedly added after the Sale Hearing ended. In addition, Barclays
failed to pay approximately $500 million of the bonuses it had agreed to pay, and paid only about
$238 million of the $1.5 billion in cure liabilities that the Court had been told it would likely
assume.
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Quote:
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38. Likewise, the estimate of cure liabilities the Court was told Barclays
would be assuming was wildly inflated. Kelly and, on information and belief, others knew the
estimate was inflated. In the end, Barclays assumed only $238 million in contract cure liabilities
out of the $2.25 billion shown on the 9/16/08 Financial Schedule and the $1.5 billion figure that
was presented to the Court as an estimate of the cure liability Barclays would assume.
39. Barclays never intended to assume anything close to $1.5 billion or $2.25
billion in the cure liabilities described to the Court.
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http://insuranceclaimsbadfaith.typepad.com/files/lehman-brothers-v.-barclays-capital-adversary-complaint-bankr.-s.d.n.y.-case-no.-09-01731-filed-november-16-2009.pdf





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Free and Clear. Section 363(f) of the Bankruptcy Code permits a debtor in possession or a bankruptcy trustee to sell all or substantially all of the debtor’s assets free and clear of any existing lien, claim, encumbrance, or other “interest” in property under certain circumstances. This power of the Bankruptcy Court to cleanse a debtor’s assets of competing claims can make them more attractive to potential purchasers, thereby increasing their ultimate sales price. It also represents a significant advantage of Section 363 over non-bankruptcy auctions and forced-sale procedures.

The statutory language of Bankruptcy Code Section 363(f) allows a debtor to sell its assets free and clear of any “interest in property” as long as one or more of the following five conditions are satisfied:

1. Applicable non-bankruptcy law permits the sale of the property free and clear of the claim or interest

2. The person or entity holding the claim or interest consents

3. The claim or interest is a lien and the proposed sale price of the property exceeds the “aggregate value” of all liens on the property

4. The validity of the claim or interest is in bona fide dispute

5. The person or entity holding the claim or interest may be compelled, in a legal or equitable proceeding, to accept money for that interest.

When any of these conditions is met, the purchaser at the Section 363 sale will obtain clear title to those assets, with the bankruptcy court’s order approving the sale serving to transfer any existing liens or claims to the sale proceeds. [2]

http://www.turnaround.org/Publications/Articles.aspx?objectID=7794