Lehman Brothers Financial SA (LEHNQ)

[SwissCheeseAccount]

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ECAPs said no thanks to that offer. They felt they would receive more under LBIE's subordinated position.

Wrong. Just more of your misleading deceptive due diligence. The actual paperwork states the opposite:

On January 20, 2009, the General Partner sent a letter to LBHI: (a) notifying LBHI that a Trigger Event occurred as of the Petition Date; (b) detailing the General Partner’s multiple previous oral and written requests to LBHI’s advisors to issue the Substituted Preferred Stock; (c) noting that the General Partner “must advise the holders of the Preferred Securities as soon as possible of the status of the Preferred Securities and whether Substituted Preferred Stock will be issued”; and (d) urgently requesting a response to the General Partner’s request for LBHI to issue Substituted Preferred Stock. See McKane Decl., Ex. 3. A month later, on February 24, 2009, LBHI sent a response letter to the General Partner, stating that “we cannot say at this time whether Lehman Brothers Holdings Inc. will be able to issue Substituted Preferred Stock, nor give you any indication as to when we will be in a position to determine the same.” See McKane Decl., Ex. 4.5

The true is, ecap holders tried to get LBHI to give them their stock, LBHI declined, and then when LBIE had a surplus, LBHI tried to then give ecap holders their stock, but since they didn’t do it at the time they were supposed to, and because ecap holders were next in line to get paid, ecap holders 1-3 got rewarded with cash + stock.