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s,
Redundancy.
Who gets this?
mojo
Interesting.
Maybe this is one possible work out:
1. Out of $97B of assets on balance sheet, there is $15B "equity" if there is a complete liquidation without NOLs or paying Creditors.
2. $70B in NOLs represents $24.5B in tax savings at (35% tax rate) in a 49%-51% Debtor-Shareholder split.
3. So, $15B + $24.5 x (.49) = $27.01B for Debtors or 9.31% of Liabilities Subject to Compromise
4. And, $24.5 x (.51) = $12.5B for Creditors after all is liquidated.
But, here is a question: If the Debtors (Liability holders on LBHI balance sheet) can make more money agreeing to another 20% to 30% write down on their claims subject to compromise, why wouldn't they agree to do so?
What terms will they offer Creditors?
mojo
Yes, joe, subsidiaries can be debtors and creditors to each other.
I admit it is a confusing job to understand what debt and credit is being paid down.
The job of the Estate Administrators is to account for this in a manner that brings the most value to the Estate.
So, I don't have all the information and all the accounting but give the news releases the benefit of the doubt as to debtor & creditor accounting.
mojo
autotel:
This statement you posted is one that I could question:
<<...was originally filed in June and could pay creditors up to $65 billion...>>
The Estate handled many Creditor claims that were accounts Lehman managed for 3rd Party Creditors. Many of those were returned. That isn't a problem.
But, Lehman is a "Debtor In Possession" or DIP facility, meaning bondholders (Debtors) not Creditors (Shareholders).
Why else would any Creditor payments be re-allocated toward POR payments? In my mind, they are paying Debtors with Creditor payments as required by the POR.
There is a difference in my mind between Creditor positions and Debtor positions no matter how the press reports the terms in their story.
I don't wish to belabor the point and understand that some people think it doesn't matter if the $65B is paying down Debt or Creditor positions, even though I think there is.
It should also be identified at some level in the distribution if the $65B is paying down principal or interest. I think it would pay down principal first so, in my mind, most of the $65B is paying down Debtor principal or at least it should.
Therefore, at 6.5%, the Estate is saving another $4.225B per year in debt service.
Good luck.
mojo
Yes, autotel, I have stated there are confusing issues and posts that use the terms Creditors and Debtors.
The press, as well, have released articles that I haven't felt identify Debtors & Creditors with certainty.
It may in fact change over news cycles where Creditors are emphasized in one cycle and debtors are emphasized in another.
I don't know what to say about this other than there could be valid reasons news is coming out the way it is.
And, Lehman continues to operate as a DIP so I skeptically read the news & posts about Creditors with that in mind.
Good luck.
mojo
Mickey,
A 1M share position selling 10K share a day goes for 100 days.
All 48M shares trading 10K a day trade for 19.2 years.
This is using algorithmic trading intervals, of course.
The point is the trading can be heavily influenced, controlled or manipulated.
mojo
Thanks for posting the article link, joe.
This article identifies there was a point when the Debtors had worked an agreement that then went back to the Creditors for signature.
It was deemed to be rejected by Creditors because of the reallocation clause and the amount of debt that expected to result in Creditor positions with no value.
But, markets change and recoveries and tax credits were eventually identified as more than expected in a rising market.
GS could be Lehman's largest creditor and is on the Creditor Committee so they were providing the leadership.
What are the rest of the Creditors to do once the largest and lead creditor supervises all debt negotiations deemed to be rejected by the Creditors?
They would just sign off.
Maybe we will get through this by the structure already in place by GS & the Courts and administered by the Estate that will survive the allocation process and pay off enough Debtor positions that it can get back on the market.
mojo
NO, guster.
The POR was assumed to be rejected by the Creditors and Creditor Committee. The Creditors weren't allowed to vote on it and anyone who claims otherwise is just not dealing with the facts.
There may be institutions with both creditor & debtor positions.
But, this is a DIP Entity or "Debtor In Possession" Entity until the POR has been in effect to a certain point and other agreements are constructed.
This is why I'm posting the questions I'm posting: At what point will the attorneys let it go back on the market because both Debtors & the attorneys realize they will make more money over the long term using the NOLs with Lehman back in business?
mojo
Guster,
Aren't you mistaking Creditors for DEBTORS?
The DEBTORS have control! This BK & POR is a DIP!!
With $290B in Debt & $96B in Assets, it is the DEBTORS of this DIP that want to liquidate, forget the NOLs and take huge write offs.
If they don't want this, they will take additional write downs on their debt, bring the Trust current for the NOLs and operate the business with the tax shelters.
But, there has been no press release as to this construct.
The POR is a plan assumed to be rejected by the Creditors.
There seems to be a lot of confusion on this Board about the Debtors and Creditors.
mojo
Then the question becomes, "Will the attorneys administrating Lehman under the POR let it go back on the market as a business when many of these attorneys would be happy to sell assets and earn fees until the asset sales close?"
mojo
That amazes me, joe stocks.
With all due respect, if you are who you say you are and in the position that you claim to hold, you should know exactly where that number is from.
I know exactly where that number is from and the reason it is being identified on this message board and in any discussions regarding the Lehman Estate.
Do your own DD.
mojo
The bank is spelled Barclays.
Barkley is a great name for a dog, though.
Although, Mr. D'Arcy is, too, if you're a Pride & Prejudice fan.
mojo
I hope you're right, cotton.
Thanks for the computation.
I don't know why you would make this computation now.
It would be really interesting if BCS was trading at $8.50, it's 2 year low.
Any timing as to when a payout would occur?
mojo
s4,
You are identifying a clause in a CT prospectus referencing a complicated intercompany issue of common shares to Holdings collateralized with the debentures.
Since the bankruptcy was filed by Holdings and not LBI, I think the rights of the CT shareholders are still in effect no matter what intercompany settlement rate is enacted because of the credit of Lehman Holdings and the Guarantees, not just the debentures.
I didn't buy any of the common shares securitized by the debentures as I never worked for Lehman.
I bought the CT issues through my discount broker and believe the claims for the CT shares not the intercompany common shares handled by Holdings.
good luck.
mojo
ro ro,
Exactly.
I think this USB claim was ultimately withdrawn as we have discussed it on this Board before.
And, this Board brings up again and again and again.
mojo
Why UBS?
Why not the theories of BCS? USB? Lehman Estate? BNYM?
I think of some coincidences that I brushed aside last year that made me wonder if UBS could be involved but they were just coincidences no closed buy orders or SEC filings.
And, I would think there would be a Government filing of some sort.
mojo
Camaro,
Do you have a link for this?
mojo
Interesting, edbk.
If the CTs are Tier 1 for US Banks, Barclays should want to take on the CTs especially after the price went down when no dividends were paid and BCS could buy a ton for pennies on the dollar.
Here's hopin'!
mojo
Yes, you're context is wrong, dingus.
Let me try to clarify a few things:
<<The junior unsubs are class 10b.>>
I'm talking about the Trust Debentures not the CT shares.
<<50%?>>
The Trust is half debentures and half credit of Lehman although the claim filed by BNYM is clearly for 100%.
<<Why in the world would they do such a thing?>>
If the Trust debt was assumed by Barclays in the Broker-Dealer purchase and in default or deferment after the Lehman BK filing, the Lehman Estate would have considered the debt relief as part of the compensation in the transaction as well as any cure costs.
I think you have a purpose you are pursuing in your activity on this Board, but I'm not at all certain of your claims in your response to my question.
In fact, I think the questions were pretty straight-forward and less complicated than you made them out to be in your answer.
Good luck joe.
mojo
joe,
We know the junior subordinated bonds are due a pay out in a designated class.
I believe this represents 50% of the $1.2B or $600M and the rest is the unsecured credit of Lehman.
So, what amounts are guaranteed in your opinion if "you may not be able to rely upon the guarantee for payment of these amounts" (or the designated coupon payments) if payments to the junior subordinated bonds are in default?
Of course, you realize that if Barclays or some other Lehman Asset purchaser has assumed the Trust and the junior subordinated debt (or junior subordinated debt balance, if agreed to) , your argument has no validity.
mojo
You have a few more minutes to correct your post, s4...
Just sayin'...
mojo
Yeah and that's the way it goes, Camaro...
Just like the "Done in 2 Years" claim by Marsal.
Just like the POR that was deemed rejected by creditors.
Just like the "3rd Distribution pay the CT" claim before the 21st LEHNQ, LHHMQ, LEHLQ & LEHKQ coupons.
Just like using NOL credits without compensating qualifying creditors.
Why should Barclays get the NOLs when they continue their sovereign perspective they are allowed to manage risk without paying anyone?
I don't like that about them.
mojo
s404n1tn0cc?
You're funny...
I'm sure all the Lehman Execs working at Barcleys Capital are completely thrilled with your suggestion of an 800lb. Monkey as well because they lost their ESOP plans.
Isn't that hilarious? Not really...
By the way, what does s404n1tn0cc stand for anyway?
mojo
Thanks cotton.
Everyone has lawyered up over the years and continue to use deductive reasoning, inference and supposition in addition to the mountains of docket filings and decisions to evaluate risk. Barclays has had a long time to tell Lehman creditors to "Go F&*$ yourself."
While the CTs will be paid additional interest during the 5 year deferment term during which time Barclays also denied in Court assuming any Lehman liabilities, how does Barclays or Lehman justify the cost of not paying the CTs liability with repayment guarantees?
I don't get the politics of this deal.
mojo
Yes, it's on now.
Maybe it was an Adobe Reader update.
mojo
Down?: Yahoo LEHMQ MB
Has anyone else noticed this and about what time?
mojo
stockbum,
The answer is no.
JPM confiscated $4B cash deposit from WAMU.
JPM withheld a $7B cash deposit from BCS, placed for the purpose of the US broker dealer, and BCS had to get a court order for the account to be released.
If BNYM thinks they can start funding CT credits without the Court decision, it's on them.
mojo
$1,713,624,394.00 is a good number.
Let me ask you stockbum:
Do you think JPM would let that kind of balance transfer out in this BK without a court order?
BNYM needs to set a date with the court IMO.
ASAP.
mojo
guster,
I don't think so.
cotton, the Burglar Hobbit, would like to help us find a home if he can.
mojo
cotton,
These secular POR agreements that the creditors were deemed to have rejected were approved in the proceeding after I had bought the issues.
Barclays could have closed on Lehman before bankruptcy and instigating US Court proceedings that administered a fire sale, ripping away employee retirement accounts, claiming NOL credits for debtor relief and deferring creditor payments.
You, cotton, sound more like our "Burglar Hobbit" with every post!
mojo
ro ro,
The 20 quarters for deferred payments started in 2008 from the last payment paid the K's on 9/15/2008.
You can confirm this K payment through Yahoo Finance LEHKQ page and the historical prices link tab and dividends paid function.
All other CT issues were paid during the prior quarter.
So, the delinquency started for unpaid CT issues last fall and they are accumulating interest.
The POR was deemed to be rejected by creditors and the CTs have repayment guarantees in the prospectus that are valid in or out of bankruptcy.
That is it for today.
Thanks.
mojo
jimmy?
tank you...
mojo
It is how they go about their business.
cotton,
So, why isn't Barclays paying the CTs and bringing them current?
How long can they keep from paying the CTs and why?
mojo
OK, so the stay was approved by the Court in its wisdom, that may allow the Plan Administrator to effect the "crystal ball" to which cotton referred.
mojo
Then, the stay is denied and there is recourse on behalf of non-employee shareholders who can evaluate the efficacy of policies over the past 5 years under the plan and seek restitution or damages if these policies were enacted with duress or egregious fees.
mojo
cotton,
Did you read all 41 pages?
Even if the RSU's were spread over preferreds & commons, they can come out with a new common issue that will raise money.
But, say they come out with 1 for 13 new common split and 1 for 4 new common split for preferreds, there is still a lot of debt and the CT guarantees.
So, I think they have to negotiate some new debt agreements with the biggest debt holders who have FED funding and will re-write some debt agreements with due dates pushed out at the minimum.
Or, they need to make an acquisition of a cash rich company that utilizes the NOLs and can finance itself with some cash that can also help pay debt and keep from skewing a new issue.
If the market doesn't see enough ability for Lehman to pay down debt schedules, a new IPO is DOA.
Thoughts?
I don't have any doubt Lehman, Weil, Marsal, the Creditor Committee and numerous Debtors have run these numbers for contingency planning as well as acquisition purposes.
So, I'm hoping for adequate press releases soon.
mojo
I didn't mean to overlook the N's, guster.
As I posted on them earlier, I think there are reasons they are part of a larger settlement and restructuring.
At least I hope so, and one that preserves their recovery priorities, even if they continue to trade on the greys.
mojo
With 2800 K shares available below the last trading price, I hope he keeps to painting the L's & HHM's.
Aren't we supposed to put ask orders in for limits of the last trading price or higher?
Go figure...
mojo