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And how does this list mean that Lehman will have enough money to pay off the CTs?
I don't think you understand what this list represents. It has nothing to do with LBHI's ability to pay out debtholders.
>>EVENTUALLY HAVE TO PAY BY LBHI. <<
With what? Lehmn does not have enough assets to be liquidated to have cash to pay CTs.
This is a bankruptcy, folks. Some debtholders don't get paid.
No, mojo. I am an investor just like you, but I study the legal documents and take them seriously.
Why is it that everyone is in denial that you hold junior debt. For the judge to dismiss the Wu motion reinforces that. Hell, yesterday not one person could come right out and say that Wu lost. Unfortunately those there will not share why.
>> Barclays couldn’t get our CTs as they purchased LBI?? <<
No. The CTs are part of LBHI and not LBI. SIPC seized LBI and sold to Barclays most assets and liquidated the remaining.
>>Just wait for Lehman to come back.<<
They are not coming back. Lehman is a LIQUIDATING TRUST. They have a court order to sell everything and wind down.
This is not misleading. read the modified plan that allowed them to exit BK.
Thanks for the link.
Supports what I am saying that the term "tier 1 Capital" is used for financial reporting. It is just a classification of capital that lehman has raised. The CTs themselves are not tier 1 capital.
What do I post that is misleading?
Take this Tier 1 issue for example. If you google "tier 1 capital" it supports every thing I said.
How about the Wu motion? Everything I posted is supported by the prospectus. The Lehman lawyers also used the same argument. How is that misleading?
Show me one post that is misleading.
CTs are not and never were tier one capital. The capital that was invested in Lehman by way of selling the CTs to shareholders was. I say was as it can no longer be treated as tier 1 capital.
Think of it this way. The capital raised by selling common shares is Tier one capital. You don't think common shares are tier one capital, do you? All Tier one capital is is capital that is invested that the company has no obligation to pay back. The Cts were considered Tier one prior to Dodd FRank changing the rules and not allowing because dividend payments on the CTs could be deferred for 5 years.
Wikipedia says;
>>the CTs are Tier 1 Capital <<
mojo, You obviously don't know what "Tier 1 Capital " is. The CTs are not.
mates, Childish response. Obviously you don't understand the concept of "karma". Making such a statement to me is not sowing goodness. Just the opposite. You comment is made to cause harm or sorrow to another. It will be you to pay the consequences of your evil act under the concept of karma.
Just say'n
Reading through the lines I make the assumption the motion was denied? Can we just say that? That the judge ruled and reinforced what the prospectus states all along that the Cts are junior subordinated debt, and the guarantee is exactly as stated with its limitations. And the plan calls for ALL senior debt to be addressed first as to distribution. You can't just jump to the front of the line!
Obviously this should END all the discussion about the how guarantee will lead to a recovery.
Read the prospectus folks! No one, no lawyers, nobody, is trying to screw you. You screwed yourself by not understanding what you invested in.
Is anyone attending the court hearing? Perhaps Jersey being as close as he is?
The price per share will indicate the results.
Good luck on the Wu decision!
I know it won't go anywhere, but I would be happy to be wrong.
>>so technically if you were to ask the person if THEY own any shares they can rightfully say no because they dont. <<
Swiss, You have brought this up before. I don't know how I could make this more clear. I do not own any shares. No one that I know personally owns shares. The only people I know that own shares are on these boards and have stated they do, and those that have filed motions in court.
I think it is stupid to own these shares as the facts of Lehman's remaining assets, and the amounts that creditors that are still owed show that there will be funds for the CTs to see a recovery. And it is just not me that thinks that. The price per share would indicate that few see value.
>>That's why all those Hedge Funds who bought Lehman/LBHI or other European subsidiaries Debt securities for literally 'pennies on the Dollar'<<
If they bought before Lehman exited they bought the bonds themselves. After Lehman exited BK they would have bought claims.
>>This whole 'Hierarchy/Ranking' that is driving the 'Recovery' for the various Asset Classes, is in fact structured based on the Underlying Prospectuses of those Asset Classes.<<
Exactly. And the various assets were assigned classes and given a claim against the estate based on those classes. That "claim" is the debtholders new "debt" holding, replacing the old debt represented under the old prospectus agreements.
Again, read the dockets. You don't see old debt being transferred. You see claims being transferred. A CT share is a claim on a claim against the estate to be paid as to priority. It is no longer debt, per se. The debt itself has been adjudicated. It is a claim on assets. Unfortunately for the Ct holders, Lehman will run out of asets to be liquidated before those claims can be paid.
Stoxjock, You really are confused about the process. It is not the CTs interest payments that are being redirected. It is what may come to them through distributions from the liquidation of assets that is being redirected to higher classes. You are implying that Lehman is still paying interest payments to the CTs. That is not the case.
The terms, guarantees, and everything else in the prospectus has been replaced by a 10b claim against the estate. If you were to buy shares of the Cts today, you would not be buying the CT's with an underlying bond, you would be buying the possibility of a distribution being paid on the claim that trust holds. Lehman has said that the class 10b claims are expected to see zero recovery.
From the disclosure statement;
Interesting. LBT sold those notes for less than 2 cents on the dollar. Distributions have already been paid on those senior claims, so the buyer expects to receive more distributions than 2%.
AMSTERDAM--(BUSINESS WIRE)--In connection with its previously announced partial wind-down, Lehman Brothers Treasury Co. B.V. in liquidation (“LBT”), through its U.S. counsel Kramer Levin Naftalis & Frankel LLP, announced that its placement agent, Seaport Loan Products LLC, successfully concluded an auction of a US$10,475,844,413 portion of LBT’s US$34,548,000,000 intercompany claim (the “Intercompany Claim”) against Lehman Brothers Holdings Inc. for a total gross purchase price of US$179,472,166. The sale is expected to close during the first week of April 2019. The net proceeds of the sale (after deducting various sale-related costs and expenses), together with certain available cash, will be used to fund a final distribution to creditors of LBT who do not receive substitute notes as a result of LBT’s prior solicitation process.
Docket 59738
1. Wu seeks “approval and granting of [his] Proof of Claim” [Mot. ¶10] – a claim alleged for the first time in April 2019 as an attachment to his Motion. Specifically, Wu
seeks recovery on a claim of $662,780.77 based on guarantees issued by LBHI (each
a “Subordinated Guarantee”) in connection with securities issued by four separate trusts that owned subordinated debt issued by LBHI.
2. As set forth below, even if Wu was permitted to file his claim, and even if the claim was allowed, any liability for the claim would be subordinated in accordance with section
510(a) of the Bankruptcy Code to the level of preferred equity in LBHI; Wu would recover nothing from LBHI in these cases.
3. Nonetheless, Wu should not be permitted to file his claim. Upon information and belief, Wu acquired his securities after entry of the confirmation order in 2011 and after consummation of the plan in these chapter 11 cases (the “Plan”) in 2012.2 By that time,
additional claims against LBHI based on the Subordinated Guarantees (held by the then-holder of
Wu’s securities) were subject to (not exempt from) a bar date. Wu has not plead, and cannot
establish, cause to permit the filing of a claim years after the bar date and possibly six years or
more after Wu acquired the trust securities and his purported claim. The Motion can be denied on
this basis alone.
4. Moreover, even if Wu could file a claim, the claim could not be allowed. As this Court held in 2011, LBHI has no liability for guarantee claims based on a Subordinated Guarantee.3 The Court has also recognized that claims like Wu’s would be duplicative of allowed
claims filed by the indenture trustees for the subordinated debt issued by LBHI linked to the
securities issued by the four trusts in which Wu invested. Indeed, the Court disallowed over 1,725
proofs of claim on that basis. The Court would find the same is true for Wu’s claim. The Motion
can be denied on these bases alone
>>That was a fast one that LBHI wanted to pull on US CTs as well as the ECAPS so that they can then claim that the 'Old Prospectuses" that 'guarantee' the CT payments "won't matter" anymore!<<
That is far fetched. How did you come up that? No documentation to support LBHI wanting to pull one the CTs. The Cts have been adjudicated and now are a claim against the estate. The old prospectuses and guarantee do no longer matter. The BK court awarded a claim for the full amount asked for. Of course the problem that it is a subordinate claim.
Yes you will see in 9 days that there is nothing to the Wu motion.
Oh, I see Camaro filed a joiner too! And Jersey too!
Wamugold, Let's debate Lehman Cts instead of speculating my motives for being bearish on the other side of the trade. I know the process better than anyone here. Afraid you might learn something?
Stoxjock, I don't think you fully understand what is going on with the ECAPs. I would suggest studying this document;
https://www.rns-pdf.londonstockexchange.com/rns/8119H_1-2018-11-19.pdf
and then docket#58884, the judge's response and order to the matter in the US Bk Court. BTW, the judge ruled against the issuance of substitute preferred shares by LBHI. The funds LBHI was holding as to the ECAPs have been transferred to the UK liquidator. All this is noted in the docs above. Obviously RSM Advisory was representing ECAP holders in Europe, and yes they DID have grounds to stop LBHI efforts to issue substitute preferred shares. Again, read the document link above from RSM Advisory as a joint liquidator. This is not my opinion. Read the docs!
The ECAPs are very different from the CTs. The ECAPs have both the UK unit, LBH, and LBHI guarantees. The CTs only have the LBHI guarantee. Much is made of this "global guarantee". Yes, there is a guarantee, but it is a guarantee subject the ranking as well with the CTs being subordinated debt, and junior to senior debt.
Stoxjock, You think you are on to something here. I will ask you. Why doesn't the market agree with you. If there was any chance at all to a recovery investors would be will to pay much more than 10 cents a share just to have a "option" of a possible payout?
There is no thievery. Shareholders here simply do not understand the process and don't fully understand what they own and its limitations.
Answer one question for me. Do you know why LBHI wanted to issue substitute preferred shares? If so, let's hear it. Your answer will be very telling if you really know what is going on with the ECAPs.
I am not the enemy of you CT holders. You all's insufficient knowledge of the process is. The CTs have no pathway of seeing a recovery. They are worth zero in the end. Wu's motion will go nowhere.
>> LBHI is arbitrary in disbursements if they are paying ECAPS and not CTs.<<
The ECAPs are a product and were sold by the Lehman UK European unit, LBIE. They were paid out of that estate through the UK BK process. The CTs were sold by LBHI. They can only look to payment from LBHI. There is nothing arbitrary about the payments. Some Lehman affiliates had enough assets to pay their debtholders in full. Others, most, not able.
The disclosure statement shows estimated recoveries for all Lehman BK US affiliates on page 6.
https://www.sec.gov/Archives/edgar/data/806085/000119312511239866/dex991.htm
>>I don't know what to tell you when you are so disingenuous and false. <<
Nothing that I have written is disingenuous and false. If fact, the price per share of the CTs indicates in itself that everything I say the market agrees with. I said Lehman exited bankruptcy. If I give you links where the top financial publications also print the Lehman exited Bk, how can you say I am posting false information?
Mojo, You do not understand the BK process. I do. Exiting BK means that Lehman exited bankruptcy and no longer has court protection. The debts have been adjudicated and a plan is put in place to move ahead. In Lehman's case that plan is to liquidate all assets and close up shop. The pre-bk debts have been cancelled and replaced with claims against the estate.
https://www.fnlondon.com/articles/lehman-brothers-exits-chapter-11-20120307
I challenge any one here to post something that I said is false.
Disingenuous? Hmm...not candid or sincere, typically by pretending that one knows less about something than one really does.
That surely doesn't sound like me.
Oh, don't believe all these people that say they have me blocked. Most that say, don't.
>>>Legalese.
I don't know what it means or why it is contained in the prospectus.
I'm not sure but it seems fraudulent to me.<<<
LOL! That gave me a chuckle. Being a businessman those pesky legalese things have been a hindrance my whole life.
>>Then why would they be Class 10B? Why not behind Common at Class 12? <<
Class 12 is equity. Class 10B is junior subordinated debt.
>>By the way, LBHI is one of 5 entities remaining in BK so you're wrong there, too.<<
No. Lehman did exit BK. The Modified Plan of liquidation order the liquidation and wind down of all units. The units that are no longer being reported have been wound down to nothing and are now closed. The five that remain will eventually do the same. Lehman exited bankruptcy basically with an order liquidate and wind down to go out of business.
https://www.npr.org/2012/03/07/148113603/lehman-exits-chapter-11-to-pay-creditors
https://www.mhlawyers.com/news/lehman-exit-vindicates-ch-11-process-experts-say
>>Marsal said he would exit BK within 2 years of the filing <<
LBHI exited bankruptcy is 2012. Took about 3.5 years. The court is now only involved to make sure the modified plan of liquidation is carried out as ordered, and to rule on any controversy that may arise or exist.
But back to the Cts and the prospectus and the guarantee. You still avoid speaking to the actual statements made in the prospectus which lays out very clearly that the CTs are junior debt. The court looks to the rights given to the CTs as stated in the prospectus. FRom the prospectus;
>>In 2011, the CTs were in a 20 Quarter deferment period. <<
In 2008 with the bk filing the 20 quarter deferment period was stayed. All attempts to collect were stayed. With LBHI's exit from BK the CTs were cancelled along with all rights to payment were replaced with a claim for approved claim amount, to be paid according to the plan. That's why you don't see bonds being transferred, you see claims being transferred. That is why the CUSIPS changed. That is why Wu wants to be class 4 instead of 10b.
>>The concessions the Courts have required while over-looking the rights of CT shareholders in the CT prospectus is not a failure of the CT owners. <<
The courts have not over looked the rights of CT holders. Again, read the prospectus. The prospectus gives you a guarantee (right) to paid after more senior debt is paid and satisfied in full. That is exactly what the court signed off on and is part of the modified plan.
>>You are not above the law, joe stocks. <<
Trying to explain the law to you does not mean that I think I am above the law. Try to better understand the law. Tell me Mojo, the subordination is very clearly stated as well as the limits of the guarantee in the prospectus. Why do you ignore the words in the prospectus? Why do you think you have rights outside of that document?
>>Is there any reason to not ask for treble damages?
<<
Because there is no active lawsuit. There is no showing of willful misconduct. The trustee got your claim approved. The CTs were put in class 10b with other junior subordinated debt and approved by the judge. If you, Wu and others disagreed, the time to file a lawsuit to change would ave been back in 2011. Wu motion will go nowhere. He does not show by case law, and any other legal argument why the CTs should be on equal footing with more senior and unsubordinated debt, contrary to what the prospectus says.
The POR approval was done with your consent. Technically the CTs voted against the modified plan for a liquidation. So did equity.
FRom the disclosure statement. (This statement alone should have had you sell your shares in 2011!)
Great response? I would say a very wordy response where Mr Wu misconstrues the facts.
For example. The ECAPS were not paid under the LBHI Guarantee. They have the LBHI guarantee just like all of Lehman's unsecured debt. But, the European affiliate that issued the ECAPs had enough assets to liquidate to pay the ECAPs. If the ECAPs relied on the LBHI guarantee alone they would have not been paid. Also, the ECAPs are also in the LBIE bankruptcy universe. If the ECAPs were part of the US LBHI case and had been issued by a US affiliate, then the parity clause would have probably put them in class 10b just like CTs. But the courts Europe basically ruled that investors of securities offered in the UK get full benefit of all assets that Lehman has in the UK.
Wu also did not provide much is case law to justify why the Cts should be treated as he argues. He really needed to respond to the defendants argument and case law given.
Looking forward to the court's response. Very interesting case.
Yep. Origen Phoenix LLC has made a couple of tender offers for these issues that are GS backed debt, and no connection to LBHI. LBSF packaged these and sold them as third party trust preferreds.
NO. LBSF is ordered to wind down and liquidate as well.
That Seeking Alpha article is three years old. What the author claimed apparently did not happen as JBK shares are higher today than back then when there may have been some concern.
This article is in reference to a small issue third part trust preferred of just $25 mil that held interest rate swaps with Lehman. The market doesn't see risk that the author sees as the shares are trading at about $2 above par and yield about 5.8%. This has nothing to do with LBHI.
From what I see this filing only pertains to LBT of Amsterdam claims.
>>Marsal & Weil have been moving the goal posts from Chp 11 to more of a Chp 7 without any concern of the equity holders, employees or subordinated debt. <<
The Lehman bk modified plan was ALWAYS considered a Chapter 11 liquidation. Chapter 7 liquidation requires immediate, court ordered liquidation. A chapter 11 liquidation allows for a more orderly liquidation to maximize collected funds for the benefit of the creditors. You can't read the plan and say it is anything else than a liquidation plan.
>>Why isn't it Chase or BNYM scooping up this stuff to recover the Trust as Tier 1?<<
Technically the CTs are not and never were tier one capital. The capital that was invested in Lehman by way of selling the CTs to shareholders such as yourself was. Think of it this way. The capital raised by selling common shares is also considered Tier one capital. You don't think common shares are tier one capital, do you? All Tier one capital is is capital that is invested that the company has no obligation to pay back. The Cts were considered Tier one prior to Dodd FRank changing the rules and not allowing because dividend payments on the CTs could be deferred for 5 years.
>>Now is the missing $283B fraudulent "White Paper?" What are they turning into the Court? How do they justify "looting?" <<
The initial filing showed total debt. Much of that debt was secured debt, and counterparty debt. By the time the liquadtion plan was approved in 2011, all the secured debt had been settled, leaving only the debt shown in the early 2012 balance sheets.
Stock mojo,
>>"They aren't in business so why do they show any cash flow?<<
They have cash flow from cash invested in short term securities, and from liquidation of assets.
>>How do you valuate assets or a business charter with no cash flow? <<
Lehman is not in the business of anything at this point as the income producing assets have been sold. The last balance sheet shows that. When they did still own buildings and stuff they had rental income coming in. That is no longer the case.
>>You said in a prior post Senior Debt has to be paid in full before subordinated debt. No, joe. They have only needed to be current if back in business.<<
That senior debt has been converted to claims. Saying that they just need to make up interest payments on debt to become current and back in business shows a complete lack of understanding of the BK process. Again, look at the balance sheet assets. Lehman is not in business and will never be again. The liquidation plan even says if anything can't be liquidated, or any assets left, are to be donated to charity. Says that right in the plan.
Newflow, On the same docket 54616 it says this;
Could have just an easily been a market maker taking those 20K shares. I don't see the trade on level 2, so I think it is more than likely an MM in early hours.
There are no institutions or larger hedge funds showing ownership in the CTs. They don't have to report OTC stocks to the SEC on forms 13D/G of F, but most do.
If the CTs had any value hedge funds would not be nickle and dime-ing for pennies. The activity you see is market makers and small time buyers. Get serious. I mean at 6.85 cents that is only a $1730 dollar transaction.
Operating report appears to show they are nearing the end. LBHI cash sources were only $4 mil from affiliates and financial instruments. No operating income. Expenses exceeded income by $2 mil. Two of the other four affiliates had no income, and no expenses. LBHI only has $264 mil in cash and investments. We know from the last balance sheet that they have few assets yet to be liquidated of less than $10mil. More senior debt holders are still over $120 BILLION in the hole.
If you think you will get paid, where do you think the funds will come from?