Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
"It's called contract law. Law is law."
At least until some judge somewhere says it isn't.
Yeah.
+0.08 +79,898.64%
LOL. A few more days of +79000% and I'm out of here!
We own NO equity in Lehman. Nada. We own Lehman debt by virtue of owning an equity position in the various trusts. Our "equity" is in the trusts, not in Lehman.
According to the POR, yes.
I especially love that last column. Just weird.
LEHLQ 0.08 +0.08 +79,898.64%
CTs are most definitely NOT in "the one big share". Only common and preferred stock. Please note the references to classes not in the one big share. From the bankruptcy admnistrator:
STOCK CANCELLATION/SENIOR NOTES FAQS:
10) I was a Stockholder prior to the filing, what will happen to my stock?
On the Effective Date, the LBHI common and preferred stock were cancelled and one new share of LBHI common stock was issued to the LBHI Plan Trust which will hold such share for the benefit of the former holders of LBHI common and preferred stock consistent with their former relative priority and economic entitlements. The beneficial interests in the LBHI Plan Trust held by former LBHI stockholders are uncertificated, non-voting, and nontransferable other than by will or by the laws of descent and distribution. The Plan states that in the event that all Allowed Claims in LBHI Classes 1 through 11 have been satisfied in full in accordance with the Bankruptcy Code and the Plan, each holder of an Equity Interest in LBHI may receive its share of any remaining assets of LBHI consistent with all rights and priorities existing immediately prior to the commencement of the Chapter 11 cases. At this time it is not anticipated that any distribution will be made to the LBHI Plan Trust or to any beneficiary of the LBHI Plan Trust.
Interesting: "Note that unsecured creditors are normally treated differently from secured or shareholders. The latter normally get nothing unless unsecureds are paid in full or get a very high percentage of recovery on their claims."
http://en.allexperts.com/q/Bankruptcy-Law-909/2012/2/lehman-brothers-bankruptcy.htm
AGAIN -- We are not equity. Even the POR does not include us as equity. We are in 10B, and have a subordinated claim, i.e. we are debt.
Equity is in Class 12. We are not in Class 12. (Note that securities in 12 are not transferable. No such restriction pertains to us.)
From the POR:
4.14 LBHI Class 10B – Subordinated Class 10B Claims against LBHI.
(a) Impairment and Voting. LBHI Class 10B is impaired by the Plan. Each holder of an Allowed Claim in LBHI Class 10B is not entitled to vote to accept or reject the Plan and is conclusively deemed to have rejected the Plan.
(b) Distributions. Holders of Allowed Claims in LBHI Class 10B shall not receive any Distributions on account of such Claims unless and until all holders of Allowed Claims in LBHI Class 3, LBHI Class 4A, LBHI Class 4B and LBHI Class 5 are satisfied in full, in which case each holder of an Allowed Claim in LBHI Class 10B shall receive its Pro Rata Share of (i) Available Cash from LBHI and (ii) Subordinated Class 10C Distribution.
4.17 LBHI Class 12 – Equity Interests in LBHI.
(a) Impairment and Voting. LBHI Class 12 is impaired by the Plan. Each holder of an Equity Interest in LBHI Class 12 is not entitled to vote to accept or reject the Plan and is conclusively deemed to have rejected the Plan.
(b) Stock Exchange. On the Effective Date, all LBHI Stock shall be cancelled and the Plan Trust Stock shall be issued to the Plan Trust which will hold such share for the benefit of the holders of such former LBHI Stock consistent with their former relative priority and economic entitlements; provided, however, that the Plan Trust may not exercise any voting rights appurtenant thereto in conflict with Article VII of the Plan. On or promptly after the Effective Date, the Plan Administrator shall file with the Securities and Exchange Commission a Form 15 for the purpose of terminating the registration of any of LBHI’s publicly traded securities.
(c) Distributions. Each holder of an Equity Interest in LBHI (through their interest in the new share of LBHI common stock or otherwise) shall neither receive nor retain any Property of the Estate or direct interest in Property of the Estate of LBHI on account of such Equity Interests; provided, however, that in the event that all Allowed Claims in LBHI Classes 1through 11 have been satisfied in full in accordance with the Bankruptcy Code and the Plan, each holder of an Equity Interest in LBHI may receive its share of any remaining assets of LBHI consistent with such holder’s rights of payment existing immediately prior to the Commencement Date. Unless otherwise determined by the Plan Administrator, on the date that LBHI’s Chapter 11 Case is closed in accordance with Section 6.6 of the Plan, the Plan Trust Stock issued pursuant to subsection (b) above shall be deemed cancelled and of no further force and effect provided that such cancellation does not adversely impact the Debtors’ estates.
(d) Non-Transferable. The continuing rights of holders of Equity Interests (including through their interest in the Plan Trust Stock or otherwise) shall be nontransferable except by operation of law.
http://www.bloomberg.com/news/2012-07-26/lehman-cash-flows-may-reach-40-5-billion-firm-says.html
"The former investment bank’s official exit from bankruptcy court after getting a liquidation plan approved doesn’t mean it is shutting up shop. The board is expected to stay on until 2016 or later, and cash flows may trickle in even after 2016, Lehman said in the filing.
August Plan
Under Lehman’s August plan, senior bondholders, including Paulson, would recover about 21 cents on the dollar. Claims on Lehman’s derivatives unit, such as Goldman’s, would be paid about 28 cents to 32 cents, with extra money from a guarantee, while commercial paper claims would get 48 cents to 56 cents, all based on each dollar of their investment, court papers show."
Maybe so my friend, but if they were trading at $10 today I'd cash out immediately with a 2000%+ profit and not wory about 6 months or a year from now
If Lehman's sole purpose actually WAS to wind down and be finished, they would have filed Chapter 7 and not Chapter 11. A company that files 11 expects and plans to emerge and move on. What that means for us, who knows, but Lehman is planning to live on.
Apartment rents rising: Good for us?
http://news.yahoo.com/apartment-rents-rise-highest-rate-since-2007-reis-040737379--sector.html
ELLIOT DEMANDS 3.2 BILLION DOLLAR PAYOUT FROM LBI.
http://www.bloomberg.com/news/2012-06-29/elliott-demands-3-2-billion-lehman-brokerage-payout.html
April financial statement posted 5/31:
http://dm.epiq11.com/LBH/Document/GetDocument/1754494
It will be difficult to get full value for Archstone because it is fairly highly leveraged. Some plan of deleveraging will be required.
Lehman Brothers Holdings Inc.’s creditors dropped a legal action against U.S. Treasury Secretary Timothy Geithner after he agreed to answer questions in writing about the defunct investment bank’s failure.
http://www.bloomberg.com/news/2012-06-18/lehman-creditors-drop-legal-action-against-geithner.html
That seems to be a reasonable question, and something to think on.
Of course if LBH simply sold Archstone off to the public, they could use the proceeds as they saw fit.
If however they created a new LBH/Archstone in order to take advantage of the NOLs, the money raised would not be the old LBH's and could not be applied to debt.
Warning: I'm not a lawyer. But I do watch lawyer shows on TV
If you are asking about WRE, they have about 1 billion in debt against 2 billion in assets.
Which one 4cents, WRE or the potential LBH-Archstone?
"Office and Commercial RE is in pretty bad shape."
Not in Washington D.C. it's not
Here's some real life (REIT) numbers for comparison:
WRE is a REIT I own. It is presently selling for between $29 and $30.
It has eps of $1.58, and distributes $1.74 annually in dividends. (Free cash flow is higher than profits.)
So it is selling at a multible of roughly 20x earnings and a bit less than that on distributions.
Not 100% comparable because WRE invests in high end office and commercial space, but a ballpark guide none-the-less.
Are any of the NY Mellon numbers our trusts?
At what price? They would get their best price offering it as a REIT, but without a feel for free cash flow it is impossible to get a total value estimate.
If they take Archstone public, and there is no certainty in that, it would almost certainly be as a REIT, which would most likely be priced as a multiple of distributable free cash flow. Since Archstone is (was) private, no one knows for sure what that number is at this time. However it will not, cannot, be priced solely on what they think they need to raise.
I would hope the LBH folks would be meticulous and determined to maximize the take from Archstone. A private sale would be quicker, cheaper, and provide a degree of certainty, but under the right conditions a public offering (as a REIT) might offer a few extra billion in return. Who knows what they're thinking?
Let's look at some math:
LBH paid 1.58 billion for roughly 26% of Archstone. That would value Archstone at just a hair over 6 billion. But
Archstone has 70,000 apartment units (as compared to ER's 150,000)which are largely upscale and thus probably produce a bit higher RoR than ER, so sold as a whole or taken public it may fetch in the 8 to 12 billion range. 12 at the very most.
I doubt that Archstone is LBH's end play, but rather just another step toward it.
Just in case we get lulled into thinking the LBH BK is over, or on autopilot, just today 35 motions, agreements, and notices were filed with the court. A similar number were filed Friday. Judge Peck has to be a pretty busy guy and, whatever he earns, it can't be enough.
See my post 10312. We are, or at least the trusts in which we own shares, are in the POR.
You own NO equity interest in LBH. None. You own equity interest in a creditor of LBH. Why do you suppose CTs aren't mentioned in the POR, but the Trusts are? Why do you suppose the CTs aren't included with common and preferreds in the Big One Share?
Go back and read the prospectus, that tells you what you are. The POR only tells you how you are being treated in the BK, the prospectus tells you what you are.
Whoever you spoke to at LBH may have been referring to what CTs are as a financial instrument, after all you hold equity in a trust that is a creditor of LBH, but you clearly have absolutely no equity interest in LBH. None. Ergo, for the purpose of the BK our trust(s) are creditors, which is why our interests are listed with other junior unsecured debt.
No. The Trusts are creditors. We own shares in a creditor of LBH, we have NO equity interest in LBH at all. Read my previous posts.
We own a share of debt. That's all.
No. Absolutely not -- 10Bs rank above all equity and must recover before equity gets a dime.
I posted the following from the POR just a few days ago. Why some people insist on going off on tangents is beyond me:
"Each holder of an Equity Interest in LBHI through their interest in the new share of LBHI common stock or otherwise)shall neither receive nor retain any Property of the Estate or direct interest in Property of the Estate of LBHI on account of such Equity Interests; provided, however, that in the event that all Allowed Claims in LBHI Classes 1 through 11 have been satisfied in full in accordance with the Bankruptcy Code and the Plan, each holder of an Equity Interest in LBHI may receive its share of any remaining assets of LBHI consistent with such holder’s rights of payment existing immediately prior to the Commencement Date. Unless otherwise determined by the Plan Administrator, on the date that LBHI’s Chapter 11 Case is closed in accordance with Section 6.6 of the Plan, the Plan Trust Stock issued pursuant to subsection (b) above shall be deemed cancelled and of no further force and effect provided that such cancellation does not adversely impact the Debtors’ estates."
If we are going to speculate, which is fine, we should at least stick to known facts rather than creating our own realities.
This is what I have been writing about. Our shares are in a trust. That trust is owed money by LBH. LBH owes us nothing. Never did.
We will recover if and when LBH pays funds to, or issues stock in a new entity to, the trust. The trust (remember thetrustee?) will then distribute whatever to us as "owners" of the trust interest. The CTs represent our ownership in the trust, and there is not a direct relationship between us and LBH. The only direct relationship is between the trust and us.
Read my 10302. I cannot make it any clearer, and it just isn't all that difficult of a concept.
What?
As of right now, CTs are in the POR.
Might they be discharged? Sure.
Have they been? Absolutely not.
What all this means, if we accept the hypotheses of some here, is that for each share we own in any of the CT Trusts, we will receive 1/8,000,000 of whatever recovery there is in any form. Allow me to speculate using a raging WAG just for example.
Say that each of the CT Trusts is granted $50,000,000 in stock in a new entity. Further, just for giggles, let's suppose that each share carried a per share value of $10.00. Each share of the trust then would be converted to 5/8 of a share $50 million divided by $10 divided by 8 million)in the new entity, or $6.25. (We should be so lucky!)
Please do not ask where I got these numbers - I MADE THEM UP - just to demonstrate how a recovery might work.
On page 18 of the POR, at the bottom, in Section 1.25, referencing the classes included in 10b, you will find the following (among many others):
(d) the 6.24% Subordinated Deferrable Interest Debentures due 2054, issued pursuant to the Seventh Supplemental Indenture, dated as of January 18, 2005,between LBHI and JPMorgan Chase Bank, as trustee;
When you stop and really think about it, we are not really hybrids. We merely own shares in a trust which is an unsecured creditor. I would assume there is little difference between our situation and the shareholders of a company that made an unsecured loan to LBH.
Interesting, because the POR clearly ranks CTs ahead of preferreds.
Under the POR (3rd and final revision) RACERS were designated to receive 27.6 cents on the dollar as part of the $65 billion in debt repayments. Additionally, the debt to RACERS came, not from LBH, but from LBSF, an "independent" corporation under the LBH umbrella. 10Bs were listed as receiving zip.
I would then guess - and it is only a guess - that one or both of these factors played a role in determining voting rights.
And remember, 10Bs and other non-secured creditors who did not get to vote were actually listed as voting against in Judge Peck's final order, so no damage was really done unless one wished to vote in the affirmative to receive nothing.