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Makes sense. LBIE has to get running and LBHI to get back whatever $ or government/treasury/or agencies (Freddie Mac, Fannie Mae, FHLB System securities) ("govt securities") that may be stuck in the CH11 filing freeze which came to be filed after the UK subsidiaries (LBIE I am assuming first) claimed it would not have the money it needed to get through the day because it hear that LBHI was filing CH 11. Or so the story goes.
In an email Aug 7, 2008 LBIE's Counterparty would no longer accept Freddie Mac securities as collateral - Lehman calling them "sticky" meaning they were harder to sell. Sep 7, 2008 - on a Sunday Freddie Mac which had been buying subprimes since 1995 was taken into conservatorship with Fannie Mae by the government. I am assuming that caused a jam in the Repo 105 process where counterparties in the LBIE part were having a hard time accepting the assets from Fannie and Freddie (securities) as collateral because of prices falling. So that left maybe the cash calls as I understand whereas I just think the two things (Our CH 11 unfreezing the pay owed of our PFD quarterly cash since 2008 and min liquidation value of 25$ for these PFD's would be triggered by a release of GSE's - Value of the GSE and NYSE listing maybe moving the Repo 105 stuck process forward and a ton ($50B?) of movement of Treasuries, Fannie Mae, or FHLB System securties to move from the counterparty to the cash owed to LBIE in the txn and then consolidating onto the LBHI bal sheet giving us maybe $50B in cash to move fwd? I'd if that makes sense I will share some info here. I think we are tied to revaluation of govt agency securties in the conservatorship that need to be released by Trump admin most likely and he did promise to do so - so maybe the value of the assets stuck i the repo 105 and CH 11 bankruptcy of the parent after the UK LBIE pulled into administration is the answer.
I'll look at it more later this is the examiners report I read I gotta go over it more:
Maybe there's some agency securities from Fannie Mae and Freddie Mac LBIE can sell off if they exit conservatorship to give us a good deal of money notice Sep7 2008 the 90+% drop in value of commons, maybe they become the way to earn billions to close these final administrations and close CH 11.
With the CH 11 of LBSF closed I think the freeze and hidden off-balance sheet assets/cash are in the counterparty that LBIE used and didn't have the cash to get through the day bc it heart LBHI was going to file CH 11, so they may have not done their daily LBHI LBIE dealings then LBIE assets to Counterparty and counterparty to UK Cash operation - it's plausible.
I just know if the last week Repo 105 was being used then that leaves just Treasuries and FHLB System securities as usable for collateral for Repo 105.
We shall see. FHLB overseer and Fannie and Freddie's conservatorship manager is the FHFA. Trump can just fire the Biden admin FHFA Director and staff who are socialists and will not release anything - whereas Trump wrote a letter 11/11/2021 saying his intention to fire his FHFA Director Day 1 in Term 1 but he had been blocked until Sep 2019 and since then he directed his FHFA Director to get the GSEs (agencies) ready for the end of conservatorship.
It's def my bet that these are all tied together and if the securities from Fannie and Freddie on the books of LBHI and LBIE or at counterparties off the books are suddenly valued at 10's 100's of $ again as both companies are strong revenue, strong liquidity producers, demand for their profit mechanism selling MBS is high -> we could be stuck because of those securities in the Repo 105 operation.
I have a lot to read but glimpsed and respect the fact you dig into old news too that have new takes thru time I have missed myself. Can you tell me what your takeaways and thoughts are? I will always do the same.
And I will finish reading shortly! Thank you!
We can pass the time and talk about how innovative and legal our accounting was as LBHI's subsidiary since they own 100% of each DST issued common stock while we rag on $NVDA pulling an Enron but in a dumber way easier to cook the books by incest with itself rather than the old mark-to-market banking approval they got at Enron to print their own cash they expected to earn over the life of a deal immediately upon signing the contract. If Enron got away with it I'd say good for you guys.
$NVDA is just lending its subsidiary shells shares and thendoing a little double counting of their accounts receivable. Hehe.
So sorry I just came swinging back in brother. I will be reading this post momentarily. Thanks for your confirmation. It is probably because I spent much time learning slowly and when I started to get really nerdy I read the 336 Page Jenner CH11 Examiner's Report. If you understand the accounting practices at LBHI and subsidiaries that really is where you go - this is why no one was jailed (not illegal) and also why LBHI had to file CH 11 with Paulson ordering them (and they listened even tho that's some Hollywood stuff imo). I think that the real reason LBHI and subsidiaries went down is the same reason counterparties, derivatives, Fannie and Freddie conservatorship happened was a time to write laws for global access of the next longer sustainable US Housing Boom and also to fill in the gaps, do a slow recovery with 0-0.25% FFR in the US so you could borrow a lot and recover the prices of real estate and related securities in surplus over the course of time before they began to fall off at the end of the 2010's. Then I believe distributions and litigations in different courts needed precedents to make rulings based on other jurisdiction's courts (in the US we need precedent, so maybe the across the pond + a consolidated LBHI balance sheet is a 50% meet halfway solution).
You get good at this and find value to wait on when you really examine the accounting and put yourself back in the past to critically think things through. It's more successful in practice than just stopping at guessing or "knowing enough" because you never can. Now I think we're almost there. Interesting thing too - I believe a lot of underseas cables and global access/platforms now participate in all these markets. The faster the txn the longer the markets are open the faster the transfer and settlement - you can do things that perhaps would make a more efficient and real-time valuation of assets like Fuld proposed to solve the 2008 problems with FAS157 and disputes about the value of some illiquid assets on LBHI books/subsidiary broker dealers consolidated onto LBHI bal sheet that is.
We will find out soon. I believe Trump will 100% fire the Biden FHFA director and order the end of the Fannie and Freddie conservatorship which would possibly also speed Lehman Brothers Holdings Inc and remaining subsidiaries processes and clawback/discovery of funds even updating book value of assets left to distribute. It's like there's just a few more wires to untangle and replace in your super computer that connects to all these different locations and counterparties worldwide left to execute pending swaps and repos. :)
I am almost certain.
I like how judge's name is Fail, these deep staters and their senses' of humor. Soon LBHI will rise like a giant phoenix bird and fly around teh globe again!
It may end sooner. Just depends how litigation moves along right?
How about the appeal ongoing in NY courts? Appears we are still not seeing any action on the 5/03/2024 filing by LBIE lawyers at Quinn Emmanuel (led by Andrew Rossman). This is still appealing the CDS payout or LACK there of by Assured Guaranty subsidiary AGFP that took 2011-2023 and then survived Appeal attempt #1 upholding the insane ruling that AGFP not only is allowed to break the ISDA 1992 contract and use some bogus alternative "valuation" process by which they claim it is LBIE that owes THEM $$$ rather than the amt of $465 Million sought in CDS payouts worth up to an est. $5.6 Billion back in 2009 should AGFP have honored the agreed payment per the ISDA 1992 swap agreement that was entered into by each party and only became an issue when AGFP was on the side of the deal where they needed to pay up to LBIE in early 2009 after the Q3 2008 collapse of the MBS market that these CDS were insuring for LBIE (and thus LBHI per the consolidation of balance sheets used to report for LBHI (as global parent of LBIE and all global subsidiaries of LBHI).
Crazy. Never ending. Odd to see them drag it out as if coordinated or waiting for the slow bi-annual progression of updates in the UK by PwC UK administrators of LBHI subsidiaries. 🤔
I personally think an appeal will be ruled in favor of LBIE as Rossman and Quinn Emmanuel make an excellent point in that upholding the AGFP "alternative" method for calculating the CDS swap value the precedent and problems set here would cause all ISDA swap agreements to be able to be blown up or backed out of by the CDS seller should they end up on the wrong side of the trade like AGFP did when the MBS market position LBIE was buying these CDS to insure crashed and triggered a CDS payout of up to $5.6 Billion back in 2008-09 as argued in this litigation since 2011 and it's first and second appeal. Now the second appeal being in limbo but with a great argument as mentioned, I can see the $465M min payout that LBIE seeks from AGFP being awarded... One must wonder how the system keeps messing this up but the damage to ISDA contracts would be catastrophic and market wide should this precedent be set for the seller to (for lack of better words) "bitch out" when they are on the wrong side of their CDS sales.
Source: https://iapps.courts.state.ny.us/nyscef/DocumentList?docketId=nBhmPgrlziYnQ3JvgTtW2A==&display=all
People who set their ask high enough like that though are smart to. Why settle for anything less than that? I more so just think it provides insight as to how the people outside this board may value these shares as we do. Nov 2025 is the deadline for taking the UK subsidiaries out of admin and we have an ongoing appeal that fundamentally would change the ISDA swap contract agreement/honoring that agreement should the appeal not be successful. So I think we are getting into the last 18 months or so of this process and you never know what will happen in the meantime. I look at the SIPC "SIPA" liquidation for the LBI book and it's 13B + surplus over the claims made and think - why wouldn't we have a distribution coming in excess or at least in agreement with what is guaranteed. =P Keep on keeping on guys.
Also interesting to see folks give up and sell 900 shares of LHHMQ today for the bid 0.003 - just pointless to do at this point. Ride it out!
Sent my business partner a message showing him how our IBKR Pro LLC account shows the bid and ask spread for $LEHKQ (which is not a feature you get on Schwab or other services we used - Scotia iTrade is how we acquired our shares since 2022). Thought I'd share it here. Ignore the typo I made claiming this was from Schwab -- again this is what my IBKR Pro LLC account shows when checking the bid ask on $LEHKQ. It's nice to be able to see the orders for once.
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IPO - 1/7/2005 - 8.00 Million Shares @ $25.00/share.
Previous Ticker Symbol: LEH-N Changed: 9/17/08
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