Lehman Brothers Financial SA (LEHNQ)

[cottonisking]

June 19, 2019 to June 19, 2022:

1 THE COURT: Do you have a motion on file?
2 MR. GREGORY: I filed a joinder with Mr. Wu. And
3 I also stated that I would support what he had in his
4 joinder.
5 THE COURT: Okay. Are you in --
6 MR. GREGORY: In addition to what I filed in my
7 joinder.
8 THE COURT: Excuse me, Mr. Gregory. I'm getting
9 close to cutting you off the line. You're not an attorney.
10 You don't have a motion on file. This is not friends and
11 family.
12 MR. GREGORY: I joined Rex, a motion with a
13 joinder.
14 THE COURT: Finish your statement, Mr. Gregory.
15 MR. GREGORY: LBH PLC subordinate notes for
16 Partnerships 1, 2 and 3 were guaranteed by the global
17 agreement that was created by the Board of Directors on June
18 9, 2005. If you look at the Capital Trust prospectus, it
19 states that the holding companies, which is LBHI's Capital
20 Trust securities, or parity with any guarantee issues for
21 any affiliate, it's a fact that the Capital Trust of the
22 (indiscernible) securities. It's a fact that the enhanced
23 Capital Preferred Securities issued by Partnerships 1
24 through 5 are preferred securities. It's a fact that the
25 general partner is an affiliate of LBHI.
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Pg 79 of 1121 So, in reading the language of the prospectus,
2 basically the Capital Trust inherits the same guarantee,
3 that global guarantee, that the ECAPS has. And that creates
4 a current liability.
5 Now, I didn't become aware of this until Docket
6 58763 was filed on August 27, 2018. It was a letter from
7 Mr. Fail that has a copy of the claims for Partnerships 1,
8 2, 3, 4 and 5, the ECAPS. And it also talks about how the
9 Lehman Brothers Special Financing guaranteed swap claims for
10 the (indiscernible) agreement for Partnerships 3, 4 and 5
11 are also guaranteed by the global agreement, even though the
12 Capital Trusts do not have a claim with Lehman Brothers
13 Special Financing, we still have a parity with the guarantee
14 for Lehman Brothers Special Financing.
15 I also have a Docket 46304 that was filed on
16 September 13th, 2014, where I mention this when they were
17 going to make a -- when they were going to pay out the
18 disputed claims, the Lehman Brothers Commercial Corporation
19 and Lehman Brothers Special Financing. But I was basing it
20 in 2014 upon the J.P. Morgan guarantee for their September
21 agreement.
22 I was not aware back in 2014 that the ECAPS had
23 their subordinate notes for Partnerships 1, 2 and 3
24 guaranteed by the global agreement. If you look at the
25 prospectus for the Capital Trust, if we're not paid anything
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Pg 80 of 1121 by LBHI, basically LBHI, according to the prospectus, will
2 divide up the subordinate debenture into 25-dollar units and
3 issue them to the holders of the Capital Trust.
4 When you look at the finance -- FINRA --
5 (indiscernible) Financial Industry Regulatory Authority and
6 the SEC, any holder who purchased these securities, since
7 they're still trading, is the holder as if they bought them
8 from day one. Otherwise, it's fraud for these securities to
9 be trading if we're not the legitimate holders.
10 If a payment is ever made out, it's going to be
11 paid out through the Bank of New York Mellon. The Bank of
12 New York Mellon is going to pay the holders of record, which
13 is us. The Bank of New York Mellon is the Trustee for the
14 ECAPS, and it's the Trustee for the Capital Trust securities
15 as well.
16 THE COURT: Mr. Fail?
17 MR. FAIL: Thank you, Your Honor. There was a lot
18 in that that, if you'd like, I can try to respond to. At
19 the beginning of the colloquy attempted to -- it was a
20 discussion about what have been referred to as ECAPS, as
21 Your Honor has identified, separate trusts, perhaps some
22 similarities.
23 Your Honor will recall, and for Mr. Gregory's
24 benefit, the ECAPS -- certain ECAPS held subordinated debt,
25 not issued like the (indiscernible) ones here by LBHI, but
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Pg 81 of 112
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1 has ruled whereby if you purchase these securities, you own
2 them as though you own them from day one, and you have
3 standing. Well, it should be considered fraud for these
4 securities to still trade if the prospectus cannot be
5 honored --
6 THE COURT: Well, Mr. Gregory --
7 MR. GREGORY: -- according to the parity rules --
8 THE COURT: I'm not going to --
9 MR. GREGORY: Go ahead.
10 THE COURT: Mr. Gregory, I'm going to engage you
11 in a detailed discussion of what the SEC has or has not
12 said. I will tell you that as far as I'm aware people trade
13 in all sorts of securities that range from worthless to
14 entirely worthless to worth a few pennies to let's see who
15 you sell it to for another penny.
16 This is a bankruptcy c