Lehman Brothers Financial SA (LEHNQ)

[cottonisking]

Continue into 2021 with the German Tax Authority's LBIE'S dividend termination deal:

$$$$$ Read boss

"During the period, the Administrators have continued to
communicate with th.e German Public Prosecutor (“GPP”) and
the German Federal Tax Authority (“GFTA”) to finalise the
consensual resolution. Final formalities are yet to complete but
the above noted distributions reflect the finalised position and so
no further material dividends to the Shareholder are expected to
be declared once completion occurs in the next Reporting
period."

LBIE'S latest progress report:

https://www.pwc.co.uk/services/business-restructuring/administrations/lehman/twenty-fifth-progress-report.html


$$$$$ keep reading boss

"Section 2:
Progress during the Reporting period
Update on progress of the
Surplus Scheme
The LBIE estate remains solvent with all admitted creditor claims
having been paid in full and a sufficient reserve being
maintained for the small number of unresolved claims.
Preferred equity dividend
distribution
Having reserved for all remaining unagreed claims and interest
in full, the company remains solvent and the interests of its
Shareholder continue to be given prominence in the
Administrators’ day-to-day outlook.
Following progress made during the Reporting period, the
directors requested the Administrators’ cooperation to make
further distributions of £100m on 17 December 2020 and £115m
on 21 January 2021, respectively to the Shareholder. The
Administrators considered that it was appropriate to consent as
they are confident that the funds can properly be paid to the
Shareholder and are not required for any other purpose.
Other progress and remaining
issues
Recovery of 2(a)(iii) amounts
During the Reporting period, position papers and skeleton
arguments were filed before a hearing of the Firth Rixson
application which took place on 14 and 15 January 2021 before
Mr Justice Hildyard (remotely via Zoom). The application is in
respect of a number of counterparties that are withholding
payment based on section 2(a)(iii) of the ISDA Master
Agreement, which provides that a party’s payment obligation is
suspended (but not extinguished) if an “Event of Default” has
occurred and is continuing within the meaning of the ISDA
Master Agreement.
Judgment was reserved and is not expected in the near term. No
recoveries are expected until after the Administration ends,
absent a consensual resolution.
German tax investigation
During the period, the Administrators have continued to
communicate with the German Public Prosecutor (“GPP”) and
the German Federal Tax Authority (“GFTA”) to finalise the
consensual resolution. Final formalities are yet to complete but
the above noted distributions reflect the finalised position and so
no further material dividends to the Shareholder are expected to
be declared once completion occurs in the next Reporting
period.
MCF
The Administrators have continued to review progress and
strategy in respect of collections from MCF and explore
opportunities to enhance the value or expedite the timing of this
ongoing realisation process.
During the Period, LBIE negotiated a compromise with MCF’s
other creditors which provided for the transfer of the majority of
Mable's assets to LBIE and an agreement for the distribution of
the remaining assets, including the creation of a trust in favour of
LBIE over MCF's shares in its solvent subsidiaries, SPML and
PML. All of MCF’s creditors, with the exception of LBIE, also
agreed to subordinate their claims in Mable's estate to LBIE's
claims in Mable's estate. This deal was concluded after the
Reporting period ended.
AGR litigation
The proceedings have been subject to considerable delay
following the postponement of the hearing due to Covid-19 and
the retirement of Judge Friedman. In the Reporting period, we
tried unsuccessfully to move the AGR litigation from the New
York Supreme Court to the United States Bankruptcy Court
seeking relief pursuant to LBIE’s Chapter 15 status. The matter
remains therefore to be heard in the New York Supreme Court
and we have just been notified of a newly assigned Judge to
take conduct of the dispute. We have no present indication on
timing.
Debt recovery litigation
Further to proceedings for a termination payment in relation to
call options written on German shares which were automatically
terminated by LBIE’s Administration, the Appellate Court in
Frankfurt found in favour of LBIE on 12 May 2020. The
counterparties involved have subsequently applied for
permission to appeal for a second time to the German Supreme
Court. We expect the Supreme Court’s decision later this year
on whether or not it will hear the matter.
During the Reporting period, the Administrators returned a total
of c.€12m in dividends (net of withholding tax and excluding
accrued interest) received on shares held as collateral and
rejected (without challenge) the clients’ second set of proofs of
debt filed in 2018.
5 Lehman Brothers International (Europe) – In Administration | Joint Administrators’ twenty-fifth progress report, for the period
from 15 September 2020 to 14 March 2021 | Your attention is drawn to the important notice on page 1