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Why sell, guster?
Lehman is getting approximately 3% or $119,214,063 in divideneds a year plus the appreciation.
Incidently, those divideneds received are enough to pay the CT yearly coupon + $44.2M which becomes tax free with the NOLs?
AVB 52wk High - $151.23; Low - $123.04
EQR 52wk High - $65.72; Low - $53.25
Blinder: "Grievous Error for US not to rescue Lehman."
Audio Link: http://www.bloomberg.com/news/2013-05-07/princeton-s-blinder-sees-better-handle-on-banks-audio-.html?cmpid=yhoo
I see now.
Thank you.
cotton:
<<Their debt claims are expunged when they are converted to class 12 equity interest.>>
I don't know what you are stating here, cotton.
Are you saying the Lehman Estate pays debtors 9% to 100% as per the POR and the remaining debtor positions are converted to equity and lose their senior debt position over unsecured creditors if not expunged?
I'd have to see more confirmation of this somehow.
2nd Rodeo?
It looks like I bet the ranch on this thing, if not the boat on the Coast.
I'm just hoping I don't have to sell anything until we're current and LAMCO rolls out an IPO.
Good luck.
Just called my broker who called the "trading desk".
LEHLQ/LHHMQ - Bid = $.17 Ask = $.25
LEHKQ - Bid = $.17 only
He didn't get LEHNQ.
Ask is moving up although some small trades are going for less which may have to do with no Bid & Ask quoted automatically.
You have to call it in and wait for it to fill.
devils...why is waynewayne mad at you?
Correction:
Settled New Common = 265.834M
Net IPO Proceeds less: Required New Common Settlement = 264.166M x $20 = $5.28332B
Price after Road Show & Prospectus = $25
Net Prospective IPO Revs Total = $6.60415B less fees
Correction:
Settled New Common = 265.834M
Net IPO Proceeds less: Required New Common Settlement = 264.166M x $20 = $5.28332B
Price after Road Show & Prospectus = $25
Net Prospective IPO Revs Total = $6.60415B less fees
13 x 53M = 689M Old Shares outstanding or 1 new share for 13 old common split
IPO price $20. $20/13 = $1.54/old common share
Capital Trusts Payout = Let float at 100% of Nominal & Coupon Payout of $74,730,000 yearly until called & $336,285,000+ cumulative payment
$25 Nominal Preferred = Convert to 51.584M New Common at 1 new for 5/4 x 1/2 or 5/8's old nominal only (no cumulative payout)
$50 Nominal Preferred = Convert to 11.250M New Common at 1 new common for 5/2 x 1/2 or 5/4's of old nominal only (no cumulative payout)
$1000 Nominal Convertible Preferred = Convert to 150M new common shares at a rate of 25 new for 1 old nominal only (no cumulative payout)
Settled New Common Shares = 212,834,000
IPO Common Shares Total = 530,000,000
Market Cap @ $20 = $10,600,000,000
Net IPO Proceeds less: Required New Common Settlement = 317.166M x $20 = $6.34332B
Price after Road Show & Prospectus = $25
Net Prospective IPO Revs Total = $7.92915B less fees
This low valuation of common & preferreds suggests 2 things:
1. There is little to no need for a new "partner" or buyer.
2. The creditors can be brought to a reasonable level of satisfaction if they continue with the company or they can sell for less.
There is little reason for further destruction of creditor interests and debtors roles can be resolved with more business or creditor positions if they'll accept them.
Let the markets work.
mik1:
<<Anyway, LBSF reserves is going to creditors.>>
This is a good sign that subs are going to creditors and that maybe the red carpet is being rolled out to creditors.
Fundamentally, it appears the $50B+ being paid out to debtors goes to principle and what is left is unpaid principle and payments and interest to bring the debtors current less any agreements by debtors that would reduce these claims further.
If the red carpet is being rolled out to creditors, it would be because the debtors feel they will do better with the creditors on some level than without. I don't know if we can find any A/L accounting to prove this.
Another question is, "What post-BK Lehman structure can be created that can work with FED low interest operations, if any, before they start raising rates?"
Does anyone know of a Lehman post-BK status that could qualify for FED operations and discount window?
Thanks.
Yes! Our "4 Horsemen" are all $.15+!
Keep going...
A DIP facility was another stop-gap measure, but if it moves priority, I hope the Estate has other solutions.
Whatever CTs I have are in an account that I don't trade with some other stocks that went "dark".
Other than that, I'm not accumulating any CTs.
A major utility came out of BK and had some preferreds survive, but most don't.
Good luck cotton...
wamugold:
<<It all depends on how much money or assets if any are left over after paying creditors etc.>>
Generally, the POR must be completed as agreed if not the Debtors paid in full before creditors see a dime.
<<I don't know if they can want to revert to chapter 7 eliminate everyone left and then form a new company with a clean slate.>>
You're correct Chp 7 for the non-Broker-Dealer is still possible, but the debtors could be gutted or receive less than "rolling the red carpet out to creditors" to operate a post-BK Lehman with a DIP facility or new partner.
But, in either scenario, someone has to step up.
Thank you for posting this, wamugold.
Have you heard an amount the Court could decide for this?
While I agree it does show questionable financial practice, if not duress, in banking operations, it was not the reason Lehman filed for bankruptcy nor was it Lehman's sole agency problem.
While it led to the claim of $31B in fraudulent funds, Lehman's derivative exposure was larger and ultimately settled at 100%.
Additionally, MS reported last week their derivatives business continues to grow after new regulations are in place.
My settlement analysis posted prior today could have been tougher on common shareholder pool of 689M shares and used a $20/53 = $.38 per common share figure.
However, it probaby doesn't matter as the Courts, Lehman Estate and Creditor Committee will be working out a settlement that includes settling this class action among others before operating a new entity post-BK.
cottonisking:
<<Would the back interest/dividends get converted to new common shares as well for the $1000 FV Convertible Preferred above?>>
Whether the interest/dividends are paid out in cash or new shares could be determined by how much cash is on hand in the Estate and what the business opportunities are post-BK.
If a buy out occurs, the new buyer would have a different agenda than the existing creditors and creditor committee, even if they are on the creditor committee.
Another stop-gap measure would be a DIP facility to secure debtor commitments and liquidity post-POR until an IPO can be sent into the market.
13 x 53M = 689M Old Shares outstanding.
IPO price $20. $20/13 = $1.54/old common share
Capital Trusts Payout = Payout $74,730,000 yearly until called & $336,285,000+ cumulative payment
$25 Nominal Preferred = Payout $158,383,600 yearly until called & $712,726,200+ cumulative payment
$50 Nominal Preferred = Payout $26,190,000 yearly until called & $117,855,000+ cumulative payment
$1000 Nominal Convertible Preferred = Convert to 300,000,000 new common & $2,092,500,000+ cumulative payout
Post Split Old Common = 53,000,000
Required New Common Share = 353,000,000
IPO Common Shares Total = 530,000,000
Market Cap @ $20 = $10.600.000,000
Net IPO Proceeds less: Required New Common Settlement = 177M x $20 = $3,540,000,000
Required Capital for Preferred Cumulative Payments = $2,923,081,200+ interest
Net IPO Revs Total = $616,918,800 less cumulative payment interest & fees
Doesn’t the deal finance itself?
This analysis uses natural numbers to solve problems for creditors as a starting point for any settlement analysis. It makes no provisions for other settlement issues such as the POR, court decisions & execution, market economics, other debt, assets, cash flow, and post-bankruptcy business plan & operations viability that contribute to the bankruptcy resources to be settled.
It will be interesting to compare this with anything that ultimately gets settled for creditors by the Creditors Committee, Estate & Courts, if anything.
Why should this plan be executed?
Math Chat
Statistical Approach to Escrow Share Restructure:
Root of 689 is 13.
13 x 53M = 689M Old Shares outstanding.
IPO price $20. $20/13 = $1.54/old common share
$25 Nominal Preferred = 1.25 new common or 103,168,000 new common
$50 Nominal Preferred = 2.5 new common or 22,500,000 new common
$1000 Nominal Convertible Preferred = 50 new common or 300,000,000 new common
Post Split Old Common = 53,000,000
New Common Share Total = 478,668,000
Market Cap @ $20 = $9,573,360,000
Capital Trusts Float = $1,200,000,000
Total - $10,773,360,000
Is it a problem this proposal creates no cash for a new Lehman entity?
And, what is the debt total that remains against all other assets?
Last, why wouldn’t the market take this new structure down to $.50 where Lehman post-BK is a penny stock?
No one is asking you to buy the CTs.
They are on the grey market and can't load up the truck with them because they trade about 5,000 a day on average.
Why?
A lot of people are holding onto them until the Estate leaves BK.
How do they leave BK?
Is it a Chp 11 or Chp 7?
It is a Chp 11 with an approved POR so a new company exits BK.
Why don't they raise the price?
Many won't buy on much volume at a higher price until the CTs are brought current.
Until then, IMO, its been 2.5 years since Marsal wanted to exit BK, and they can still go Chp 7 and into liquidation while CTs get zip...
More on the same case.
Link: http://www.theage.com.au/business/councils-could-get-half-money-back-20130415-2hw2s.html
Australian Unit Apparently to Blame for Lehman Brothers Bankruptcy
Link: http://dealbreaker.com/2013/04/australian-unit-apparently-to-blame-for-lehman-brothers-bankruptcy/
Australian unit to see 39.9% to 49.2% of claims.
LBI Article - 3 Hours Ago
2 Points -
1. A dividened was reinsated last November.
2. Wind down could take a lot more time in Europe and no value is placed on the Lehman name.
Link: http://uk.finance.yahoo.com/news/unravelling-lehmans-could-us-10-195041455.html
Nobody knows, JH, of a pay out to be received for the CTs if any.
However, it doesn't stop posters from trying to raise the sperm count on the deal...
What are you saying?
The estate is going to take $10B in assets out of BK with no debt and start over?
What are the future prospects of a company like that doing business on the Street?
Why specifically is the interest anything significant?
Yes, the interest on K's & L's is higher than the N's & HHM's but how does it effect the the settlement in your view?
By the way, with interest rates so low, I researched the market yesterday and my broker was quoting a $25 Preferred issue at a 7.5% coupon that was trading at $29+.
So, theoretically, the $1.2B nominal value of the CT's could settle much more debt if the debt holders would take a rate discount to 3% to 5%.
Keep working.
daisyxu:
<<Only thing I can think of is a majority of senior debt collectively approved a lowball por recovery at the expense of upper echelon of waterfall because they also accumulated a large amount of preferreds and commons.>>
Why should the debt holders be paid 100% on any BK exit unless they were to take equity or a subordinated role in a new venture?
The fact claims have been paid almost $50B as agreed in the POR is compliance and good for the process.
It seems these payments would initially go toward principle payments and not interest, which is good, and could be a part of other settlements.
The Lehman estate is also receiving NOL tax credits upwards of $5B per year and this is also good.
The brokerage sale is done and other settlements are forthcoming.
The issue then comes to is there a Lehman entity that can exit BK and do well on the market and what is the structure of that entity?
Many think there is an entity that would succeed.
But, the debt structure isn't clear partly because we don't know the remaining Senior debt payments going forward and other debt agreements.
The CT & Preferred face value total $9.7B and $11B, with the UK Preferred, but they may be contained in LBHI.
To bring them all current would require some $2.7B + interest or less if the convertibles were adjused in a new common offering.
The court and estate executors were very correct to seperate the CTs from the other issues to capture NOLs as the company emerges from BK.
The lawyers and bankers can always be accumulating any shares on the market up to 5% of outstanding shares without announcing anything.
So, the question becomes, "Why does the price action remain so crappy for the CTs?"
JPM conference call Friday should be good.
Some of the most anticipated questions:
"How much have we set aside for litigation?
"Do we have an idea how much we unnecessarily wrote down customer assets (most notably WAMU & LEHM) with our increasing collateral demands until they filed for bankruptcy protection?"
How much longer can we retain their claims before payment?"
"Can you tell us shareholders how much exposure remains because of the Whale in Europe?"
"Mr. Dimon, can you tell us why you are still our CEO?"
Any other possible good ones?
Nick,
Most likely you purchased a preferred issue or common share that is now in an escrow account.
The escrow accounts are in two (2) pools: 1. Preferred issues and 2. Convertible Preferreds and common.
Bankruptcy attorney and estate administrators have stated the shares are expected to be paid out nothing.
So, the likelihood of any payment remains zero but depends on how the estate is ultimately settled and exits the courts.
Good luck.
CTs need not be mentioned with NOLs.
They are the only securities trading that were considered "equity" so this can be inferred or deduced.
I'm staying off line and let you lawyers hash it out while hoping for the best.
Then while no other equity has been trading since the escrow accont was established for common and preferreds, Marsal has enough in NOLs to bring the CTs current and call them if that is what he wants to do.
Logically.
Deductively.
Thank you.
There are many questions left.
You, autotel, sound closer to the issue than I am.
I find it hard to believe:
1. All CTs have exactly the same covenants from company to company and affiliate to affiliate.
2. No NOLs have been paid out to Lehman over 4.5 years in BK, the exact reason why a Lehman equity issue must remain trading.
Thank you for posting.
autotel:
<<File Chapter 11 then start selling assets. Pay off the POR.Put all the remaining good assets in a new company.In the new company at 51% has to be owned by the old preferred and common shareholders to use the NOLs. They can leave the CTs in the old bad company if they want. Discharge the old bad company.>>
Two (2) remarks:
1. Is your BankAtlantic example an international affiliate holding company example? It seems as though this would be pertinent.
2. I can't see that it would be reasonable to take a trust issue at higher priority, discharge it in a "bad company" and take a "good company" public with 51% of the new common assigned from lower priority preferred and common issues now in escrow.
Furthermore I've read the CTs were re-instated to trade and qualify the company for the NOLs.
Cotton's computation of $17,960.80 (remaining POR Distribution) - $14,977.1 (April 4 Claims Paid) = $2,983.7B or the $3B due in September 2013.
If the EQR/Avalon equity is $3.9B, it would seem we've met the POR by $900M where the CTs require $333M to be brought current and $75M yearly.
Do you have any other objection why this should not be paid?
"Reserve" shares, autotel?
Are you posting about convertible LBHGP & LEHPQ preferreds in escrow?
Thanks.
The term "discharge" seems to be presumptuous.
If we define the POR as a liquidation, then to identify the CTs as debts to be discharged upon accepted settlement is logical.
But, the Court is approving a plan to make an entity exit from bankruptcy so the discharge of a debt that could be brought current and re-instated as equity can not be precluded.
Furthermore, recent press releases give hope that more rather than less can eventually exit in a new company or merge with another institution.
Lastly, I think the market still remains with a void without Lehman, if Lehman exits bankruptcy they will serve a purpose.
Thank you.
Thanks.
Maybe this month is the earliest the CTs could be brought current & re-instated, if ever.
After re-computing the Preferreds as all cumulative, I doubt they'll ever get brought current again. Too many and no track record for re-affirmation as stated.
There might be another settlement looming for them, but very unlikely.
Not all preferred issues are cumulative.
Therefore, the unpaid coupons (divideneds) will not be paid back on non-cumulative issues while the face value percentage is estimated at 00% as are all shares whether they've been reinstated or not.
POR suggests claims to be paid at .09 to .29 cents on the dollar so this time period fits within his schedule.
Thank you.