Lehman Brothers Financial SA (LEHNQ)

[real777mellon]

There's a little more to my reasoning but my job is to moderate and the only thing toogood keeps going on about is cotton is out of scope by sharing the pwc UK progress reports. He also thinks assets transfer to LBHI. That's not how it works. LBHI is a consolidated balance sheet whereas the subsidiaries - I'll just mention LBIE in the UK and compare to LBI in the US (both subsidiaries and broker dealer books under LBHI) have actual books where the do transfer and buy and sell/repo assets. All of those books, like LBI have a bank that actually holds the assets and puts in the trades/clears the trades the investment bankers perform etc. They do counterparty txns with other banks too - and repo 105 is a "sale" done by inter-company repo txn with no fee when a US based subsidiary like LBI or LBSF transfers an asset to the LBIE broker dealer in the UK and they "sell" the asset to a coutnerparty (Barclays and UBS are mentioned in the examiner report from 2011).... then the asset goes off the balance sheet for 7-10 days at LBHI - the whole time, the balance sheet at LBHI is just that, a balance sheet. IT consoldiates all its subsidiaries esp the ones I mentioned into its own balance sheet, which is why when a repo 105 sale to say UBS happens in the UK the cash is received at LBIE and their electronic accounting system's ledger which immediately puts it in the LBHI balance sheet on the assets side as cash.

Also if a transfer of assets from LBI to LBIE takes place the LBHI ledger never changes as both subsidiaries roll up into one consolidated LBHI balance sheet. Toogood never accepts this so that's why he is not right. He is misinformed and refuses to read sourced information that I gave him with explanation. What is something I won't go deep into is because of Repo 105 specifically, LBHI balance sheet is using its subsidiaries and a combination of UK Linklaters legal firm's legal opinion on what makes something a "true sale" and not a repo where you must put a liability on ultimately LBHI's balance sheet. The opinion of what a "true sale" is and when a repo makes it not was never given by the US legal entities when LBHI sought an opinion bc lawyers in the US cannot give opinions on "true sale" in terms of accounting practice. What type of assets LBHI's subsidiaries used followed SFAS 140 an accounting principle that required a liquid investment grade asset to be used for this type of transaction in asset sales if done in another jurisdiction and that there's a market for it in that jurisdiction with accurate quoting similar to the US - and they usually used Treasuries for this and used UBS and Barclays as a counterparty. When the txn hit the sheets from LBIE again and the assets were "purchased" back by LBIE - it was assumed LBIE's electronic system was entering these repurch in accordance with US GAAP.

So anyway - there's so much toogood is wrong about. Too much that you're wrong in saying to forget the details - the details matter. If you are not going to read the 2011 Examiner's explanation of the accounting practices of LBHI and all of its subsidiaries you will never fully grasp the details and the fact there very well may be billions off the books that never got into LBIE's electronic filing on time. It's likely known to be out there and I'd appreciate if you'd let me do my job moderating when this happens as I was kind to explain toogood is not right at all.

Your post is not too long. There is no such thing when it comes to discussion of the LBHI and 80+ global subsidiaries 16 year unwinding and distributions both public, all over different jurisdictions, and some off the books potentially worth tens of billions as admitted in the Examiner report in 2011 that could explain the "hole" some found at times in the LBHI balance sheet.

I hope that makes sense.

I took a mod position to keep this forum cleaner than the nonsense and dick swinging at the FNMA boards. Also I feel I am more than qualified to explain nicely and correct too good when he's targeting cotton and spreading a false accusation. I don't want false info here if it's targeted at someone on topic.

Thanks.

Feel free to read the Examiner report. It's long but it's worth grasping: https://www.jenner.com/en/news-insights/news/lehman-brothers-holdings-inc-chapter-11-proceedings-examiner-s-report

Example of a Repo 105 US based subsidiary asset transfer to LBIE to "sell" to it's counterparty and go off LBHI's balance sheet for 7-10 days while still receiving cash immediately on the balance sheet consolidated from LBIE and not having to record any liabilities.