Lehman Brothers Financial SA (LEHNQ)

[BREAKER098]

This is where it gets complex.

ECAPS are deeply subordinated — they get paid only after:

Senior creditors
Unsecured creditors
LBHI's own liabilities

However, per prior Amended Framework Agreements, a portion of certain recoveries (like from LBH PLC) can flow to ECAPS holders.

16.8% of ECAPS holders have agreements allowing them to benefit from these recoveries via the Trusts.

BUT — even with that, there's a giant "if":

If the assets are depleted or the remaining recoveries are consumed by upstream obligations, ECAPS holders may receive little or nothing.

So here we are....back to speculation and risk. Time will tell - but one thing is for sure - this will be small, slow and uncertain.

You’re at the Bottom of the Waterfall

ECAPS are junior to:

Senior debt
General unsecured claims
Even LBHI’s own subordinated debt

If upstream claims fully consume estate recoveries, there’s nothing left for LEHNQ.

Most Assets Have Been Liquidated
The majority of the Lehman estate has already distributed value to senior claimants.
What remains is mostly residual intercompany claims (like LBH PLC or LBIE in the UK).
Many of the underlying assets are toxic or gone (e.g., subprime, Alt-A mortgages).

Only a Subset of Holders May Be Entitled
The AFA only applies to signatory holders.
Non-signatory ECAPS holders may receive nothing unless further settlements are negotiated or court-ordered.

Go figure...