Lehman Brothers Financial SA (LEHNQ)

[toogoodfella]

LBHI IS BROKE AFTER ALL ASSET IS DISTRIBUTED

To reorganize, LBHI will need a fresh capital. The possibility of a new capital is from the creditors themselves. In fact about 10 percent of all creditors are the affiliates and they received about 90 percent of about 130 billion distributions. The 90 percent of creditors who received about ten percent of the distributions are mostly small holders and they are all paid satisfied in full.

If LBHI will cease to exist, the unpaid debt (129B liabilities subject to compromise) will become a complete loss for the creditors. “129 BILLION LOSS”

Rather than closing LBHI and just accepting the loss, The creditors “may” decide (big possibility) to capitalize LBHI and turn all unpaid debt into equity stocks… Or, .. may discharge part of it and utilize the discharged part as NOL. (Losses).

Creditors who owns the new Capital will then become in control as the majority owner of the company.

(I HAVE SAID MANY TIMES NOL IS THE ONLY HOPE)

The good part is that the existing equity holders are the owners of the existing 50B NOL. This existing 50B NOL therefore can be joined with creditors own NOL that can be utilized by LBHI as a going concern.

THE 50B NOL IS NON TRANSFERABLE. THE ORIGINAL OWNER (equity holders) ARE THEN SAFE AND CANNOT BE ELIMINATED. Commons may become heavily diluted by Creditors new capital investment but all preferred vehicles will stay on its Face values.

“ONLY IF LEHMAN STAYS AS A GOING CONCERN”

REPEAT:
“ONLY IF LEHMAN STAYS AS A GOING CONCERN

There are indeed some good signs of LBHI will continue to exist as a going concern”

Number one is they filed a Chapter eleven instead of chapter seven.

Secondly, They put all equity stocks in escrow in order to avoid the change of ownership that will void NOLs value… NOL IS PROTECTED.

In practicality, everything is supposed to be negotiated with the creditors even before the POR is written and tailored to the negotiated Plan.

TRUPS:
The interest payments (about 15 years deferred) must be paid immediately before or after a going concern is announced to get out of default.

AGAIN:
“ONLY IF LBHI WILL STAY AS A GOING CONCERN”

I have been saying these many times in 15 years.