~ Good Morning, I Was Asked To Look At The LB CT’s By A Friend ~
I’ve never presented here, so in respect of all of the long timers, I will tread lightly and seldom ... however I will keep track of these Lehman Brothers Capital Trust Offerings ...
My first observation was that they have continued to be in a position to be bought or sold ... This means that these CT’s are not a part of the LB Creditor Classes and they are continuing to openly move on the “Secondary Market” ... I saw that they are listed as a Preferred Purchase, and not as Fixed Income ... this verifies the ability for them to continue to move on the Secondary Market as a preferred interest returning accumulation only’ ... secondary market purchases of these CT’s would not qualify for a principal plus an interest return aligned with their LB supporting debentures, ... they would only qualify for an accommodation of their face value plus their interest assignments ...
A Corporate Capital Trust operates and functions separately from the aligned Corporation, ... these LB CT’s are no different ... other than their individual offering
The US Codes Bankruptcy Rule 510 “Subordination” mandates that upon a Court Approved Plan of Reorganization, a bankruptcy filers ‘Senior Indebtedness” must be “Addressed” ... First’ ... it’s Court Approved Creditors ...
The word “Addressed” is used as a legal guideline because most times a filer for bankruptcy, will not be able to completely Pay, all of its creditors ... so as long as the Court is satisfied that the “Senior Indebtedness” has at a minimum been “Addressed” ... the financial process can move forward ... In my opinion, LB’s Senior Debt has not met this threshold quite yet’ ... soon ? yes but not yet
There is a distinct difference between a Courts Plan Approved “Creditors” and the bankruptcy filers “Claimants”
These LB Capital Trusts that functioning separately, would be in a distribution holding pattern until the LB’s “Senior Indebtedness” has been Either finalized, paid, or at a minimum has been “Addressed” ...
That is when these LB Cap Trusts will become free to function properly once again ...
Thank You, and I Hope That Was Helpful To all, Again, a friend asked me to look at these CT’s, and these are my opinions and conclusions regarding these LB CT’s ...
AZ
