Lehman Brothers Financial SA (LEHNQ)

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"The Court June 19, 2019, Judge Chapman...Mr. Gregory...":

Under the confirmed plan for Lehman Brothers Holdings Inc. (LBHI), the LBHI Plan Trust—not the class 10b creditors—would receive any post-discharge payments from JPMCB related to the capital trust preferred securities.
Here's a breakdown of the bankruptcy structure that clarifies why:
LBHI Plan Trust holds equity: As of the plan's March 6, 2012 effective date, LBHI issued one new share of common stock to the LBHI Plan Trust. All previous equity, including LBHI's direct ownership of capital trust preferred securities, was canceled. The Plan Trust holds this new stock for the benefit of the former shareholders, and it is the sole asset of the Trust.
Reallocation of subordinated claims: Your description correctly notes that the subordinated debenture claims from the capital trusts (grouped in class 10b) were not expected to receive distributions. Instead, any payments were "automatically redistributed to holders of [allowed senior unsecured claims against LBHI]".
Discharge absolves prior debt: A bankruptcy discharge releases the debtor (LBHI) from most of its debts. Payments made after the effective date are governed by the new plan and the entities created under it, such as the LBHI Plan Trust.
Plan Trust captures post-bankruptcy value: In the scenario you describe, a payment from JPMCB would be a recovery on a litigation claim or another asset related to the post-bankruptcy entity. It would be an asset of the Plan Trust, which was created to hold and liquidate remaining assets and distribute the proceeds according to the plan.
Summary of payment flow
JPMCB's payment would go to the post-bankruptcy entity.
The post-bankruptcy entity is the LBHI Plan Trust, not the holders of class 10b.
The Plan Trust would distribute any funds from that payment according to the terms of the confirmed bankruptcy plan.
Class 10b creditors would not be the direct recipients of this payment because their original claims were reallocated under the bankruptcy plan and their rights to new payments would be governed by the Plan Trust.

AI Overview



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In the event JPMCB makes a payment to holders of LBHI's capital trust preferred securities after LBHI's bankruptcy discharge, the funds would go to the LBHI Plan Trust, not the creditors in Class 10B. The bankruptcy plan effectively settled all claims, including those in Class 10B, using the assets available at the time of the settlement.
Here is a breakdown of why the payment would be directed to the Plan Trust:
The role of the LBHI Plan Trust
Established to hold assets: When Lehman Brothers Holdings Inc. (LBHI) exited bankruptcy in March 2012, it established the LBHI Plan Trust.
Holds new common stock: The Plan Trust was issued one share of new LBHI common stock, and all prior common and preferred stock was canceled.
Benefits former shareholders: The Plan Trust holds the new LBHI stock for the benefit of former stockholders, including the capital trust preferred securities holders.
Receives and distributes proceeds: The Plan Trust is designed to receive and distribute any proceeds from its stock, which includes any post-discharge payments, to the beneficiaries.
Why Class 10B would not receive the payment
Class 10B claims were discharged: The claims represented by Class 10B, derived from the subordinated debentures backing the capital trust preferred securities, were handled under the terms of the bankruptcy plan.
Claims were reallocated: The specific language of the plan reallocated these claims to senior creditors and the Plan Trust. Once the plan became effective and the debt was discharged, the claims were legally settled.
Discharge prohibits collection: A bankruptcy discharge permanently releases the debtor from personal liability for discharged debts and prohibits creditors from pursuing any further collection action. A post-discharge payment from a third party like JPMCB cannot retroactively benefit a class of creditors whose claims were already settled and discharged.
How a JPMCB payment would be handled
Any post-discharge payment by JPMCB related to the prior capital trust preferred securities would effectively be considered a recovery on behalf of LBHI itself. Because the LBHI Plan Trust now represents the economic interests of the former LBHI stockholders, it would be the appropriate entity to receive the payment and distribute it according to the terms of the trust agreement.

The question:

in lehman Brothers holding inc's bankruptcy, subordinated debentures in class 10b represent capital trust Securities' subordinated debentures claims that are reallocated to Senior Creditors' and LBHI's plan trust hold capital trust preferred Securities' allow claims thereof on March 6, 2012. if jpmcb makes A payment to LBHI's capital trust preferred Securities' holders after LBHI's bankruptcy discharge, would LBHI's class 10b receive JPMCB 's payment or LBHI's plan trust receive the payment?