Friday, October 10, 2025 12:30:51 PM
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.
On March 6, 2012 my Capital Trust Preferred Securities' were canceled and started back trading around March 12, 2012.
