Lehman Brothers Financial SA (LEHNQ)

[cottonisking]

panel that someone wants to be heard.
2 MR. GREGORY: Your Honor, this is Ricky Gregory
3 speaking. I've been working very closely with Mr. Wu on his
4 motion. And basically, due to the fact that the ECAPS
5 general partner was taken off the register of companies in
6 London, did not have a voice from June 2010 --
7 THE COURT: Mr. Gregory, ECAPS --
8 MR. GREGORY: (indiscernible) go ahead.
9 THE COURT: Mr. Gregory --
10 MR. GREGORY: Yes.
11 THE COURT: ECAPS has nothing to do with this.
12 MR. GREGORY: Let me make the link (indiscernible)
13 for you.
14 THE COURT: ECAPS has --
15 MR. GREGORY: Can I make the link? Can I make my
16 statement for you very quickly? Basically, LBH PLC has their
17 subordinate notes for Partnerships 1, 2 and 3 guaranteed by
18 the Board of Directors' June 9, 2005 global guarantee.
19 A clause in the prospectus for (indiscernible)
20 states that we are parity with any guarantee for any
21 affiliate --
22 THE COURT: Okay. Mr. Gregory --
23 MR. GREGORY: Go ahead.
24 THE COURT: Mr. Gregory --
25 MR. GREGORY: I'm listening.

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.

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

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