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LOL!!
"<<This is still a crap shoot. If the CTs payout, I should take some of the profits to enroll in a gamblers anon program.>>"
Nellagoober,
If you do enroll in a gamblers anon program, just think of all the legalese you'll miss reading!
mojogoober
I'm glad I could help!
Did I talk to you?
I like working with you in New York, but I don't get why you want to build a REIT or PE Trust and keep a bunch of airplanes that depreciate faster than a high quality CBD facility in France or a Park Avenue development lot.
If you have to keep da planes, mikgarita, let's buy AIG's ILFC unit for a proper presence in the market.
But, maybe you can't do that and meet the POR payments, too.
I know you're doing your best and I hope it all works out.
mojo von goobergoober
What is the significance of the October 3 POR distribution?
Technically, I've been told Lehman is already out of BK!
When I said "final POR payment" would it have been more accurate to say, "final POR payment totaling the $63B they need to pay to exit BK?"
Regardless, we know the POR is structured to formulate pay dates and payments toward principle of a certain amount prior to leaving the Courts & Legal Administrators.
So, the POR isn't the last attempt to pay debtors & creditors.
mojo
I hope to see a re-positioned Lehman legacy, but I'm only a shareholder and have to wait for their announcements like you, camaro4goober!
mojo von goobersteen
mikgarita,
I don't mean to speak out of turn with any administrators and attempt to say only that what is in the public domain as administrators require the opportunity for necessary operations without complicating agency issues.
I'm waiting, too, for their announcements and plans to work.
I hope to see compromise in the debtor positions so the Estate will have an opportunity for a new offering for new capital and a succesful position on the market that will generate new revenues, new profits and new business.
Thanks for the interest.
dry mojito
But, mik-lachevsky, they could pay off the POR and still liquidate.
So, if you ask me, and I know you haven't, may I suggest all see the benefits of bringing the CTs current, keeping assets and management together and optimizing re-structured finance?
It may seem like a lot to some who have lost it all or are offered $.09 to $.20 on the $1.
But, if we can keep administrating business opportunities and agreements going forward, I think we can re-position the company for success and I think it is our best shot.
mojo
Very few people are bidding up the shares either.
It looks like most bids are coming in to the lower bid price where presented which also explains why there are so few shares traded.
But, even if they raise the bid, there may not be the shares available to trade.
j-dub,
Why would JPM file this claim and BNYM file another claim for the same CTs?
Who is now the Trustee?
Who is the Transfer Agent?
By the way, all the claims in JPMSI/LBHI Securities Law Claims (Exhibit C) include:
1. All CTs ($1.2B)
2. $1.5B "G" Preferreds
3. $3M "F" Preferreds
4. A $1B LBHI 6.625% issue due 2012
The Total = $3.703B.
Additionally, "JPMSI & Bear Stearnes and its assigns" were identified as though BSC initially had some part in the offering.
Any thought on what part? Maybe the debenture?
Last point: It is clear multiple claims are being filed for the same liability to the Lehman Estate.
This may be perfectly reasonable for the role of the claimant, but it seems it's rolled into the "Claims Subject to Compromise"?
mojo
wamugold,
It's like wanting to be wealthy and married and having a Banker cheat you out of both at the same time.
mojo
daisyxu,
Why does the Estate want to call CTs anyway?
It is less expensive to bring them current on their delinquency date and let the CTs float on the market. $74.73M a year or $18.6825M a quarter isn't a huge sum when they could wait to be called in 2052.
Once current, there will be risk that may not ever bring the market value close to the face value and may drive them back into deferment.
To say there is no risk to holding the CTs and that the owners only dream for unreasonable, 100% compensation ASAP isn't true.
mojo
Excellent post, hestheman.
Bankruptcy law administrates court proceedings and POR with the confirmation of a judge.
However, the covenants in a security prospectus are placed by company attorneys and officials to capitalize value on the market.
Unless the company attorneys have written covenants that conflict with other issues in the company illegally, I don't see how the covenants in the CTs could be overturn even if there are a couple of possible outcomes.
It seems that you & I are the few objecting to the "Debtor Only" view of the Estate Administrators & POR.
When will they advocate & include the views of the Creditors?
mojo
cottongoober:
<<"She was surprised when I told her that Lehman Brothers has paid almost $50B, since their March 6, 2012 effective date, to their creditors.">>
More likely paid to Debtors not Creditors.
mojo
How do I knows, VivaLasGoober....
Why does Obama golf with Chinese golfers?
If you have da Nestles Crunches, I'll get 'em from you, devilsgoober, on da black sand beach in Hawaiis...
figure, devils, figure...
That sounds definitive.
Are you a debtor also, devilsgoober.
Do you own bonds or have you actually filed claims?
mojo
Are you going broke devilsgoober?
mojo
Godfather,
You could also ask:
1. What is the post-BK entity structure & focus?
2. Why are the administrators selling assets that are concentrated in that business focus?
3. Why haven't the administrators sold other assets that have remained on the books if they are outside the legacy structure?(i.e.- Aircraft assets)
4. Who is the administrator(s) making these decisions, how much have they been compensated and how long do they expect to keep Lehman in this disadvantageous position?
Regards.
mojo
devilsgoober,
He's the LuddyGoober who likes to keep a liddy on it...
mojogoober
Someone posted they wanted to be uplisted to NASDAQ a couple weeks ago.
Was that you VivaLas Goobers?
mojo
etzetrade,
I've posted an analysis consolidating shares of CTs, Preferreds & Common using natural numbers and breaks as well as the emphasis on covenants in prospectus, position of creditor in repayment and ability of Estate to repay.
All of this can be computed by the Court Administrators and Estate.
Some Debtors are accepting Creditor positions. This could represent a strategy that is also a reflection of their skill set. However, not all Debtors could be good Owners or Creditors.
What isn't clear is why the Debtors choose the path of Liquidating without re-positioning the Estate to keep quality assets together in a business that will all be re-financed and generate revenues?
If this is the new end game, and not liquidation, the Estate, including Debtors, Creditors & Management, will have more of a future to work with in an appreciating currency market.
I don't see Lehman as an Enron or WorldCom where management created models for building infrastructure capacity that was nowhere near the asset value.
mojo
Luddygoober,
Debtors own bonds, notes and cp.
Creditors own trust preferreds, preferreds and common.
To say "Lehman is the Debtor" is saying they are a DIP or Debtor in Possession, continuing the POR perspective that all Creditors are assumed to have rejected.
I'm hoping they will "roll out the red carpet" to the Creditors soon with a plan that keeps assets together with a new offering to pay off more debt and generate revenues.
As Debtors, it is clear the attorneys are in control and liquidating to pay bills instead of running a business and positioning the company for future growth.
Thats all for now.
mojo
I don't know, camaro, when it will be done.
I just spoke with an administrator again and they are all working in lockstep with the final POR payment in site.
I hope to hear good news as we get closer to that day.
mojo
camaro,
I don't know where they get 6 months either.
They could be right, but I don't think they really know. $314B in Claims subject to Compromise tells me the time period could be anything.
This last POR payment shouldn't come as a surprise.
If the CTs don't have anything to do with the POR, they do have a lot to do with the post-BK legacy with a prospective successor obligor, reaffirmation of the Charter & Prospectus, debt re-structuring and ultimate discharge with payment in full.
Having just spoken with a Lehman bankruptcy administrator, it seems their description of events is from the perspective of paying off the POR for the Debtors without any Creditor interests.
I continue to hope to soon hear more from Debtors and Administrators that they stand to gain more from working with Creditors post-POR than weakening their currency without them.
mojo
camaro,
Don't you really mean Debtors and not Creditors?
If the Debtors are paid per the POR, then maybe it is time the Creditors will see something.
mojo
starnesy goober,
The Estate should make an improvement on the rates if they call the CTs.
Probably, it is better to call them sooner rather than later in that event.
The post-BK Legacy would benefit from reaffirming the CT prospectus and all the rights therein, but this requires "payment in full" to be discharged.
How that plays out with the POR with reallocation I'm not sure.
It seems that under any reallocation scenario within the POR they will always have reaffirmation and full payment before discharge clauses to deal with unless they reaffirm the CT prospectus and call back the shares.
But, how reallocation and the final POR payment plays into this is not clear at the moment.
mojo
Interesting.
Why would they halt trading?
What would they do with shareholders who bought after a halt date?
OK, hesdagoober, but they've been callable since 2008 & 2010.
Why they didn't use those dates or represent the sales receipt as a callable issue isn't clear.
So, we do agree the trust preferreds are all callable.
Now, what is going to happen so they won't default?
I've listed the call dates before on the board.
The call dates are from the prospectus for each of the CTs and range from 2008 to 2010.
This means the issues are callable at anytime.
So, why would a market data aggregator like Bloomberg or broker like E-trade or anyone else say the issue is called on 9/18 or 12/18 or at any 30-day date after purchase?
I guess I still don't understand.
mattygoober,
The WAHUQ shares didn't have the same prospectus covenants as the CTs so I expect the CTs to be treated differently.
The devilsgoober is with the LasVegasGoober driving the camaro4goober today.
Go figure...
mojogoober
What's betters?
VivaLasGoobers, camaro4goober or goober4me?
Da devilgoober dinks evryone should have their own hockey arenas...just sit back and have a coca cherry cola...and watches...
I'm aware why banks are in business and can appreciate the work necessary to produce profits.
But, at some time engineering can create a hazard if led by a false teacher in a false economy.
How much wiring does a light bulb require to work properly before creating enough heat to set fire to a building?
Another thought is, irish, at some point CTs have to support real business.
So, writing off another $1.2B loss to sell another round of securities for tax purposes isn't good business in itself but solely financial engineering.
If US Bank controlled the Trust, just what would be the assets and the asset valuation that would justify new preferreds and writing off the loss?
Consequently, the hypothetical you suggest seems very unlikely: writing off assets at a loss but having enough assets to propose another offering.
Somewhat counter-intuitive.
But, why would an irishgoober seek to understand an investment that went to British Barclays from the beginning?
mojo
irish,
You either believe in the CT incentives at the beginning and buy to comply, or you don't!
You can't get a little bit pregnant.
mojo
Not sure, irishgoober.
Did you think you'd "throw it against the wall and see if it'd stick"?
What is your point?
US Bank are large Debtors to Lehman as well, maybe the largest.
With all the covenants written into the CT prospectus, US Bank obviously thought they could potentially amount to a waterfall as well as some Debtor positions.
Reaffirming the CTs could also keep them in line for other Lehman assets.
There may also be a tie in with the Aurora Bank at one point, even if that operation has been sold off.
Entities like US Bank, JPM, GS or Met are powerful entities with a strategy in mind including fallback positions.
So, I think we'll just have to watch how it works and benefit if we have invested alongside their interests correctly.
Sure, ro ro...
I think hesthegoober, cottongoober, devilsgoobersteen...a lot of us have been anticipating who is benefitting from the tax treatment and the requirements to qualify for the tax treatment.
At some point, the Debtors may decide they can realize more of their claim if they work or roll out the red carpet with good Creditors and Management trying to do the best for the post-BK Company.
There are differences between Debtors and Creditors, although some financial entities are large enough to be both in this case.
Frankly, I'd like to see the prospectus reaffirmed, reinstated and paid in full by a successor obligor in the case of the CTs.
Hopefully, they will decide to do this soon.
Not bad at all, irish.
If you add the $2B to the $28.8M, you get to $2.0288B on $5B in Earnings for the Lehman Estate currently.
Most likely, Lehman was using all it could to pay debtor's claims over the past 5 years that it wasn't paying many taxes.
But, I think your point is more about going forward as a Lehman Legacy post-BK and operating in an environment with tax advantages and their are merits to the CTs for post-BK Lehman, Barclays, US Bank or whomever pays them.
irish,
I appreciate the post, but may I note a few corrections?
1. 48,000,000 x $1.5 = $72,000,000
2. $72M x .40 = $28.8M
Consequently, the tax savings, although present, is much less by computing the divideneds alone.
However, if you add the NOLs of $5B/year, the CTs qualify the Company revenues for tax treatment that is a great benefit for both the Debtors and Creditors.
Thank you.
mojo