Lehman Brothers Financial SA (LEHNQ)

[cottonisking]

I ran many test cases in AI over the past two weeks. Here is one from six days ago:

On March 6, 2012, the effective date of the Lehman Brothers bankruptcy plan, all existing common and preferred stock of Lehman Brothers Holdings Inc. (LBHI) was canceled and rendered worthless. Therefore, there were no shares of Parity Securities linked to this date.
Instead, the bankruptcy created a new entity:
LBHI Plan Trust: The trust was created for the benefit of the former stockholders of LBHI. A single share of new common stock was issued to the trust, representing all former equity interests.
Beneficial interests: The former stockholders, including holders of Parity Securities like the Capital Trust preferred securities, received nontransferable beneficial interests in the LBHI Plan Trust. Their right to any potential payouts from the trust was tied to these beneficial interests.
Parity Securities claims: At the time of cancellation, the Capital Trust preferred stock was treated as an unsecured subordinated debt claim in Class 10B. Though the stock itself was canceled, a claim was allowed for the "liquidation amount" of $25 per share.
This means the ultimate right to a payout was not based on the number of shares on March 6, 2012, but on the claim derived from the former ownership of those shares. Some of these Capital Trust preferred securities were still trading on the OTC market years later, though they were expected to receive little to no distributions.


AI Overview


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An estimated 48 million shares of Lehman Brothers Holdings Inc. (LBHI) Capital Trust preferred securities were outstanding at the time of the bankruptcy settlement.
Details of the Capital Trust preferred securities
Total shares: The 48 million shares were associated with four different Capital Trusts issued by LBHI, and each had a liquidation amount of $25 per share.
Ticker symbols: The four specific issues of Capital Trust preferred stocks were:
6.00% Series M (LHHMQ)
6.375% Series K (LEHKQ)
6.375% Series L (LEHLQ)
6.24% Series N (LEHNQ)
Bankruptcy claim: Under the plan, these preferred securities were categorized as "Parity Securities," which were holders of a Class 10B unsecured subordinated debt claim. In the final distribution plan, payouts to this class were reallocated to higher-priority classes, making a recovery unlikely.
Effective date: The LBHI bankruptcy plan became effective on March 6, 2012, which is the relevant date for determining ownership for distribution purposes.
Market activity: For years after the bankruptcy, these securities continued to trade on the OTC Pinksheets market, despite the low probability of any recovery for holders.

Go back and read my posts. The algorithms in AI are being influenced since a week ago. 😂