Lehman Brothers Financial SA (LEHNQ)

[cottonisking]

October 10, 2023 Re Lehman Brothers Holdings PLC (In Administration) Day 2
1 complete. And therefore there is , as I understand it,
2 a residual portion, I don’t know what size it is , who
3 have not formally signed up, if that is the right term.
4 MR JUSTICE HILDYARD: Right, okay.
5 MR BELTRAMI: But that is something that essentially can’t
6 be legislated for at the moment.
7 So far as the administrators are concerned, they
8 propose to distribute along these lines .
9 MR JUSTICE HILDYARD: Yes. I suppose there are two issues
10 very closely related . 👉️The first is whether, as I take
11 it to be, all ECAPS holders and all persons interested
12 under the DB banner have had full and proper notice of
13 the fact that this was ”put up or shut up” time in terms
14 of raising any arguments they wished to raise.👈️
15 MR BELTRAMI: Yes.
16 MR JUSTICE HILDYARD: Point 1. Point 2 is whether, in the
17 time available , they had personally committed to the
18 agreement you have handed up, 👉️which is, you say, some
19 have, some haven’t.👈️
20 MR BELTRAMI: My Lord, yes. This may ultimately I suppose
21 may be something for Ms Hilliard, because it is a matter
22 between the GP1 liquidators --
23 MR JUSTICE HILDYARD: Yes.
24 MR BELTRAMI: -- and the ECAPS holders.
25 MR JUSTICE HILDYARD: Yes, you are right.
5
1 MR BELTRAMI: My understanding certainly is I know the heads
2 of terms were published through the RNS and other media
3 I think about three weeks ago, and they were given two
4 weeks to object as a result of it . And that’s --
5 unfortunately your Lordship has suffered from that,
6 because that was the reason I think that the agreement
7 was done on the Sunday as opposed to some time earlier,
8 because the period of time --
9 MR JUSTICE HILDYARD: (Inaudible) my suffering.
10 MR BELTRAMI: The period of time had to elapse, and that
11 period did elapse and then the agreement was signed.
12 MR JUSTICE HILDYARD: Very good.
13 MR BELTRAMI: So there was that notification going forward.
14 I don’t know if it is necessary to go through the
15 details of what happened after that ...
16 👉️MR JUSTICE HILDYARD: No, I don’t think so, providing
17 everyone is content that all parties who think they may
18 have an interest in arguing the contrary knew this was
19 the time to come and say so.
20 MR BELTRAMI: My Lord, yes.
21 MR JUSTICE HILDYARD: And very closely related to that is
22 that the legal holders I think of the ECAPS notes, who
23 I think are BNY Mellon, are they?
24 MR BELTRAMI: Yes.
25 MR JUSTICE HILDYARD: And they -- I hope I don’t slight them
6
1 or misrepresent the position to say that they have been
2 very interested to know that they will not be liable for
3 any costs in respect of it , and that apart from that,
4 they are willing to go along with it , if I can put it
5 that way.
6 MR BELTRAMI: Yes. My Lord, the holder became relevant.
7 Normally the way things work, as your Lordship knows,
8 not irrelevant but not the main event. The holder
9 became relevant because of issues 4 and 5. Issues 4 and
10 5 alleged a trust in relation to monies received --
11 MR JUSTICE HILDYARD: Yes, exactly, and whether you had to
12 turn over.
13 MR BELTRAMI: Exactly, and that put them in the frame, and
14 that is where they became interested. Issues 4 and 5
15 have now been settled, issues 4 and 5 are not coming
16 back, so their role as potential trustee is no longer --
17 is not an active --
18 MR JUSTICE HILDYARD: And that’s all been said, they are not
19 contrary to it in any way, this is a matter that has
20 been resolved, to their knowledge?
21 MR BELTRAMI: This is a matter that has been resolved.
22 No one is allowed to argue that point going forward.
23 MR JUSTICE HILDYARD: Fine, that’s very good to hear. Thank👈️
24 you.
25 MR BELTRAMI: 👉️My Lord, only one thing on finality I should
7
1 mention.👈️
2 MR JUSTICE HILDYARD: Yes.
3 MR BELTRAMI: There is an outstanding issue in the estate,
4 and you might remember that this was discussed at the
5 last directions hearing we had, which has been called
6 the partial discharge issue . That relates to a question
7 of the monies due to the unsecured creditors who had the
8 benefit of a guarantee --
9 MR JUSTICE HILDYARD: Oh, yes.
10 MR BELTRAMI: -- given by LBHI, which was settled earlier on
11 in the estate, and monies were paid under that guarantee
12 to certain parties who were, and continue to be,
13 unsecured creditors.
14 Now, after the Court of Appeal decision in ECAPS 1,
15 in which it was decided that in relation to the LBHI
16 claimants on the subordinated debt, monies paid in
17 discharge of the earlier guarantee liabilities , not in
18 full but in part, should be used to reduce the balance.
19 That issue has created --
20 MR JUSTICE HILDYARD: A sort of abatement.
21 MR BELTRAMI: Exactly. And there was an insolvency rule
22 that you can prove in full .
23 MR JUSTICE HILDYARD: Yes.
24 MR BELTRAMI: Now, that has raised a parallel question
25 insofar as unsecured creditors are concerned who are in
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