Lehman Brothers Financial SA (LEHNQ)

[cottonisking]

How does the Lehman Brothers Plan treat claims filed under the June 9, 2005 Guarantee Resolutions?

"Many of the Affiliate Guarantee Claims based on the Guarantee Resolutions are included in LBHI Class 4B."


***

"DEBTORS’ DISCLOSURE STATEMENT FOR

THIRD AMENDED JOINT CHAPTER 11 PLAN OF LEHMAN

BROTHERS HOLDINGS INC. AND ITS AFFILIATED DEBTORS

PURSUANT TO SECTION 1125 OF THE BANKRUPTCY CODE




WEIL, GOTSHAL & MANGES LLP
767 Fifth Avenue
New York, New York 10153
Tel: [phone]
Fax: [phone]

Attorneys for Debtors and
Debtors in Possession

Dated: August 31, 2011

New York, New York
.
.
.
C. Validity and Enforceability of Guarantee Claims

In the aggregate approximately (a) $315 billion of Guarantee Claims were filed against LBHI by its Affiliates and (b) $255 billion of Guarantee Claims were filed against LBHI by third-parties that are not Affiliates of the Debtors (“Third-Party Guarantee Claims”), in each case including estimated amounts for Claims filed in unliquidated amounts. Guarantee Claims



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filed by Affiliates consist largely of Claims asserted against LBHI based on (i) a purported guarantee of a specific transaction that an Affiliate entered into with another Affiliate; (ii) LBHI’s purported guarantee of all of the obligations of certain of its subsidiaries (such subsidiaries, the “Guaranteed Subsidiaries”) pursuant to resolutions adopted pursuant to a Unanimous Written Consent of the Executive Committee of the Board of Lehman Brothers Holdings Inc. (the “Guarantee Resolutions”) or (iii) a purported guarantee by LBHI of net worth or asset values.

The Debtors are reviewing each of the Guarantee Claims and considering the circumstances surrounding the entry into the underlying contract or obligation, including whether: (i) the guarantees are valid and enforceable contracts; (ii) the guarantees were properly executed by the appropriate parties; (iii) the claimant was an express or intended beneficiary; (iv) the claimant actually relied upon the guarantee at the time that it transacted business with the primary obligor; and (v) the guarantee is avoidable under chapter 5 of the Bankruptcy Code. With respect to Guarantee Claims based on the Guarantee Resolutions, the Debtors also considered, among other things, whether (a) the Guarantee Resolutions constitute guarantees or contracts between LBHI and the Guaranteed Subsidiaries; (b) the claimant had actual knowledge of the Guarantee Resolutions at the time it transacted with the Guaranteed Subsidiary and (c) additional documentation was required to create an enforceable guarantee.

The Debtors have significant defenses to the enforceability of many of the asserted Guarantee Claims. Evaluation of each Guarantee Claim requires extensive fact-intensive investigation and analysis and could result in substantial discovery among the parties and likely active litigation.9
.
.
.
(v) LBHI Class 4B- Senior Affiliate Guarantee Claims against LBHI

Senior Affiliate Guarantee Claims include any Guarantee Claim asserted by an Affiliate of LBHI that is entitled to a contractual right of priority in payment to the Class 10B Subordinated Notes and Class 10C Subordinated Notes, but not the Class 10A Subordinated Notes, but excludes any Claim that is based on an “Other Financial Obligation” (as such term is



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defined on Exhibit 10 annexed hereto), which is generally defined as Derivatives Contracts. Generally, LBHI Class 4B includes, without limitation, Claims filed by Affiliates based on LBHI’s purported guarantee of indebtedness for money borrowed by another entity, including any securities, notes, debentures, bonds or other similar instruments issued by an Affiliate of LBHI, and any other amounts due from LBHI in connection with the prepetition cash management system of Lehman. Many of the Affiliate Guarantee Claims based on the Guarantee Resolutions are included in LBHI Class 4B.

Each Debtor asserting a Senior Affiliate Guarantee Claim will have an Allowed Claim in the amount set forth on the Debtors’ Claims Schedule. Each other non-Debtor Affiliate asserting a Senior Affiliate Guarantee Claim will have an Allowed Claim in the amount agreed to by LBHI and such non-Debtor Affiliate. If LBHI and a non-Debtor Affiliate are unable to agree on the Allowed Claim amounts, LBHI intends to object to the Claims of such non-Debtor Affiliate.

In addition to the Distribution of their Pro Rata Share of Available Cash, holders of Allowed Claims in LBHI Class 4B will receive their Pro Rata Share of amounts that, if not for certain contractual subordination language, would have been distributed to holders of Allowed Subordinated Class 10B Claims against LBHI and Allowed Subordinated Class 10C Claims against LBHI. Claims in LBHI Class 4B are impaired by the Plan and are entitled to vote to accept or reject the Plan."

https://www.sec.gov/Archives/edgar/data/806085/000119312511239866/dex991.htm

***

LBHI's TRuPS (or CTs) = "By virtue of the Guarantee Resolution, the Securities are fully guaranteed and payable by LBHI." = one for one stock conversion formula or dollar for dollar payout! = JPMCB ("Unaffected Matters,” Docket 54683) = secured debt

Note: Holding LBHI's Preferred Securities is equal to holding their subordinated notes in LBHI's class 10B.

***

LBHI's Preferred Securities -

"on a parity with the most senior preferred or preference stock now or hereafter issued by Lehman Brothers Holdings and with any guarantee now or hereafter entered into by Lehman Brothers Holdings in respect of any preferred securities of any affiliate of Lehman Brothers Holdings,"


***

"PROSPECTUS SUPPLEMENT

(To prospectus dated June 5, 2001)

8,000,000 Preferred Securities

LEHMAN BROTHERS HOLDINGS CAPITAL TRUST VI

6.24% Preferred Securities, Series N

(Liquidation amount $25 per preferred security)

fully and unconditionally guaranteed, to the extent set forth herein, by

LEHMAN BROTHERS HOLDINGS INC.

Maturity Date January 18, 2054

Distributions Payable

Quarterly, beginning April 18, 2005. May be postponed for up to five years, but not past the maturity date.
.
.
.
"
The trust that is issuing the preferred securities will have no assets other than subordinated debentures issued by Lehman Brothers Holdings. These debentures will have essentially the same terms as the preferred securities. Therefore, the trust can only make payments on the preferred securities if Lehman Brothers Holdings first makes payments on the subordinated debentures."


https://www.sec.gov/Archives/edgar/data/806085/000104746905000357/a2149684z424b2.htm

***

"5. On June 9, 2005, the Executive Committee of the Board of Directors of LBHI
adopted a resolution by unanimous written consent providing for the full guarantee by LBHI of the payment of all liabilities of LBH plc (the “Guarantee Resolution”). The Guarantee Resolution, a copy of which is attached hereto as Exhibit D, states that “[t]he Corporation [LBHI] hereby fully guarantees the payment of all liabilities, obligations and commitments of the subsidiaries set forth on Schedule A hereto [including LBH plc], each of which shall be a Guaranteed Subsidiary.”
.
.
.
9. The Plan Administrator does not address the Guarantee Resolution, whereby LBHI guaranteed the obligations of LBH plc, including the LBH plc Guarantee with respect to the Securities. By virtue of the Guarantee Resolution, the Securities are fully guaranteed and payable by LBHI. Accordingly, the relevant portions of the Claims against LBHI are enforceable and should be allowed.

"
*******LBHI Docket 32893***********

32893 12/17/2012 Motion for Omnibus Objection to Claim(s) /Three Hundred Eighty-Sixth Omnibus Objection to Claims (No Liability Claims) filed by Lynn P. Harrison III on behalf of Lehman Brothers Holdings Inc.. with hearing to be held on 1/30/2013 at 10:00 AM at Courtroom 601 (JMP) Responses due by 1/16/2013, (Harrison, Lynn)


Case: Lehman Brothers Holdings Inc.


Related: none

******Docket 33954************

33954 01/16/2013 Response to Motion RESPONSE OF CREDIT SUISSE TO DEBTORS THREE HUNDRED EIGHTY-SIXTH OMNIBUS OBJECTION TO CLAIMS (NO LIABILITY CLAIMS) (related document(s)[32893]) filed by Richard B. Levin on behalf of Credit Suisse. (Attachments: # (1) Exhibit A# (2) Exhibit B# (3) Exhibit C# (4) Exhibit D) (Levin, Richard)


Case: Lehman Brothers Holdings Inc.


Related: 32893

**********************

"1
[[3389188]]
CRAVATH, SWAINE & MOORE LLP
825 Eighth Avenue
New York, NY 10019
Telephone: [phone]
Facsimile: [phone]
Richard Levin (RL 1651)
Attorneys for Credit Suisse
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
In re
LEHMAN BROTHERS HOLDINGS INC., et al.,
Debtors.
)
)
)
)
)
)
Chapter 11
Case No. 08-13555 (JMP)
(Jointly Administered)
RESPONSE OF CREDIT SUISSE TO
DEBTORS’ THREE HUNDRED EIGHTY-SIXTH OMNIBUS OBJECTION TO
CLAIMS (NO LIABILITY CLAIMS)
Credit Suisse AG; Credit Suisse (Monaco) S.A.M.; Credit Suisse (UK) Limited; Credit
Suisse AG, Singapore Branch; and Credit Suisse Securities Europe, Limited (collectively,
“Credit Suisse”), by and through its undersigned counsel, files this response (the “Response”) to
the Three Hundred Eighty-Sixth Omnibus Objection to Claims (No Liability Claims) [Docket
No. 32893] (the “Objection”) filed by Lehman Brothers Holdings Inc., as Plan Administrator
(the “Plan Administrator”) with respect to the portions of the claims held by Credit Suisse to
which the Objection relates (the “Claims”), and respectfully states as follows:
BACKGROUND
1. Commencing on September 15, 2008, Lehman Brothers Holdings Inc. (“LBHI”)
and affiliated debtors (together with LBHI, the “Debtors”) commenced with this Court voluntary
cases under chapter 11 of the Bankruptcy Code (the “Code”).
2. On October 29, 2009, Credit Suisse timely filed proof of the Claims against
LBHI, copies of which are attached hereto as Exhibit A, in accordance with the Bankruptcy
08-13555-jmp Doc 33954 Filed 01/16/13 Entered 01/16/13 13:56:19 Main Document
Pg 1 of 4
2
[[3389188]]
Code, the Federal Rules of Bankruptcy Procedure, the Order Pursuant to Section 502(b)(9) of the
Bankruptcy Code and Bankruptcy Rule 3003(c)(3) Establishing the Deadline for Filing Proofs of
Claim, Approving the Form and Manner of Notice Thereof and Approving the Proof of Claim
Form dated July 2, 2009 [Docket No. 4271] and the Notice of Deadlines for Filing Proofs of
Claim Based on Lehman Programs Securities dated July 27, 2009.1
3. On December 17, 2012, the Plan Administrator filed the Objection with respect to
the securities identified by International Securities Identification Number (“ISIN”)
XS0215349357 and ISIN XS0229269856 listed on Credit Suisse’s proofs of Claims, as
described more fully in the Schedule attached hereto as Exhibit C (together, the “Securities”).
4. The Securities were issued by Lehman Brothers UK Capital Funding L.P. and
Lehman Brothers UK Capital Funding II L.P. (the “Trusts”). The Securities were guaranteed by
Lehman Brothers Holdings plc (“LBH plc”), a non-debtor subsidiary of LBHI (the “LBH plc
Guarantee”). Objection, ¶ 10.
5. On June 9, 2005, the Executive Committee of the Board of Directors of LBHI
adopted a resolution by unanimous written consent providing for the full guarantee by LBHI of
the payment of all liabilities of LBH plc (the “Guarantee Resolution”). The Guarantee
Resolution, a copy of which is attached hereto as Exhibit D, states that “[t]he Corporation
[LBHI] hereby fully guarantees the payment of all liabilities, obligations and commitments of the
subsidiaries set forth on Schedule A hereto [including LBH plc], each of which shall be a
Guaranteed Subsidiary.” Ex. D. Accordingly, all obligations of LBH plc, including under the
1 Clariden Leu Limited (a/k/a Clariden Leu AG or Clariden Leu SA) (“Clariden Leu”) timely filed Claim number
55813. Effective April 2, 2012, Clariden Leu merged into and is now named Credit Suisse AG, as reflected on the
Notice of Claimant Name Change and Amendment of Proof of Claim submitted to the Debtors’ claims agent on July
13, 2012, a file-stamped copy of which is attached hereto as Exhibit B. Credit Suisse has transferred a portion (but
not all) of Claim 55813. As a result, Credit Suisse is the owner of a portion of Claim 55813, as more fully described
on the Schedule attached hereto as Exhibit C.
08-13555-jmp Doc 33954 Filed 01/16/13 Entered 01/16/13 13:56:19 Main Document
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3
[[3389188]]
LBH plc Guarantee issued in connection with the Securities, are fully guaranteed and payable by
LBHI.
RESPONSE
6. Under Bankruptcy Rule 3001(f), “[a] proof of claim executed and filed in
accordance with [the Bankruptcy] rules shall constitute prima facie evidence of the validity and
amount of the claim.” Fed. R. Bankr. P. 3001(f); see also In re DJK Residential LLC, 416 B.R.
100, 104 (Bankr. S.D.N.Y. 2009). Upon the Debtors’ objection, the “burden of going forward
then shifts to the objector to produce evidence sufficient to negate the prima facie validity of the
filed claim. . . . [T]he objector must produce evidence which, if believed, would refute at least
one of the allegations that is essential to the claim’s legal sufficiency.” In re Spiegel, Inc.,
No. 03-11540 (BRL), 2007 WL 2456626, at *15 n.6 (Bankr. S.D.N.Y. 2007) (quoting In re
Allegheny Int'l, Inc., 954 F.2d 167, 173-74 (3d Cir. 1992)).
7. The Objection does not provide evidence that refutes the prima facie validity of
the Claims. The Plan Administrator concedes that the Securities were guaranteed by LBH plc
but asserts that LBHI has no liability with respect thereto because “neither the Trusts nor LBH
plc was a debtor in these cases.” Objection, ¶ 9. The Plan Administrator does not address the
Guarantee Resolution, whereby LBHI guaranteed the obligations of LBH plc, including the LBH
plc Guarantee with respect to the Securities. By virtue of the Guarantee Resolution, the
Securities are fully guaranteed and payable by LBHI. Accordingly, the relevant portions of the
Claims against LBHI are enforceable and should be allowed.
CONCLUSION
8. For the foregoing reasons, Credit Suisse respectfully requests that the Objection
with respect to the relevant portions of the Claims be overruled and that the portion of the Claims
to which the Three Hundred Eighty-Sixth Objection objected be allowed as filed.
08-13555-jmp Doc 33954 Filed 01/16/13 Entered 01/16/13 13:56:19 Main Document
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[[3389188]]
Dated: January 16, 2013
New York, New York
Respectfully submitted,
CRAVATH, SWAINE & MOORE LLP
Richard Levin
825 8th Avenue
New York, NY 10019
Telephone: [phone]
Facsimile: 212-474-3700
Email: [e-mail]
ATTORNEYS FOR CREDIT SUISSE
08-13555-jmp Doc 33954 Filed 01/16/13 Entered 01/16/13 13:56:19 Main Document
Pg 4 of 4 "

*** LBHI AND JPMCB SETTLEMENT AGREEMENT DATED

2/1/2017 - Docket 54683 page 25 of 53 ***



"“Unaffected Matters” means claims filed by or on behalf of any JPMorgan Entity
or any affiliates or funds of a JPMorgan Entity, or in which any JPMorgan Entity or any
affiliates or funds of a JPMorgan Entity has an interest, that are not Settled Matters,
including without limitation claims filed by or on behalf of a JPMorgan Entity as agent,
for a customer or for a fund that it manages, claims relating to Canary Wharf, claims held
from time to time by a JPMorgan Entity’s distressed claims trading desk, and any other
claims that JPMorgan did not assert were covered by LBHI’s August and September
2008 guaranties and security agreements in favor of JPMCB’s subsidiaries and affiliates.

For the avoidance of doubt, claims relating to the LBSF Action are not Unaffected
Matters. Lehman reserves all objections and defenses to the Unaffected Matters."