Lehman Brothers Financial SA (LEHNQ)

[Joe Stocks]

That motion was to preserve the NOLs through the liquidation process for the benefit of the creditors receiving as much as they could from the sale of assets. That is the reason they went chapter 11 liquidation for an orderly liquidation of assets over time, versus a chapter 7 which would have meant the immediate fire sale of assets.
That motion was written in 2010. The disclosure statement of 2011 adds this;

The IRC provides that a debtor in a bankruptcy case must reduce certain of its tax attributes – such as current year NOLs, NOL carryforwards, tax credits, capital losses and tax basis in assets – by the amount of any cancellation of debt (“COD”) incurred that arises by reason of the discharge of the debtor’s indebtedness.