EVERGREEN SOLAR NOW SEES THAT BARCLAY'S WAS TAKING ITS SHARES WITHOUT AUTHORIZATION...the Perfect Storm. LBHI Docket #5422
As this Court is aware, Evergreen is a plaintiff in that certain adversary proceeding
captioned Evergreen Solar, Inc. v. Barclays Capital, Inc., Lehman Brothers Holdings, Inc., and
Lehman Brothers, Inc., Adv. Pro. No. 08-01633 (JMP) (the “Adversary Proceeding”), arising
from the unauthorized sale of certain shares of Evergreen Common Stock by Lehman Brothers
Inc. (“LBI”), agent under that certain Share Lending Agreement, dated as of June 26, 2008 (the
“SLA”).1 In that Adversary Proceeding, Evergreen alleged that LBI lacked authority to transfer
the loaned shares (the “Loaned Shares”) in its possession solely as agent to Barclays Capital, Inc.
1 Capitalized terms not defined herein shall have the meanings ascribed to them in the SLA, a copy of which has
been provided to this Court in connection with Adversary Proceeding (defined below).
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(“Barclays”) at the time of the sale, LBI failed to provide Evergreen with notice of the sale
despite the fact that the SLA had terminated, and Evergreen, as a result of the defendants’
actions, was damaged through, among other things, the loss of the Loaned Shares and by a
corresponding and substantial dilution of its Common Stock. Now, LBI and Lehman Brothers
Holdings Inc. (“LBHI”), together with the Committee, have moved to reconsider the Sale Order,
claiming that “mistakes, inadvertence, or misrepresentations” led to the approval of the Sale
Order and that assets that should not have been sold were transferred in secret to Barclays under
the guise of the Sale Order. This is the very same subject matter of Evergreen’s Adversary
Proceeding with respect to the Loaned Shares.
While Evergreen was naturally not alone in suffering a loss upon Lehman’s failure,
unlike the vast majority of unsecured creditors and customers of Lehman, a substantial portion of
Evergreen’s loss—approximately 12,304,187 shares—could have and should have been
prevented both as a matter of law and in the interests of equity. By the time the shares were
transferred, certain events of default had occurred under the SLA and LBIE was required to
return the shares through its agent, LBI, to Evergreen. Instead, those shares over which LBI did
not hold title, but merely held as an agent for LBIE (which itself had lost title to its holdings of
the Loaned Shares upon default), were swept up into a whirlwind sale (the “Sale”) to Barclays.
According to the Debtors, the Committee, and the SIPA Trusteee, it now appears that
Barclays—which throughout its dispute with Evergreen has consistently touted the fairness of
the Sale process—took advantage of the exigent circumstances surrounding the Sale by securing
for itself a windfall profit and by arguing that assets transferred outside the scope of the Sale
Order approved by this Court were validly “purchased.” Although much of what has been
uncovered by the Committee, the Debtors, and the SIPA Trustee remains under seal, and
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therefore unavailable to Evergreen at the time of this pleading, the Committee Motion describes
in sufficient detail how Barclays managed to conceal the nature of the securities transferred to it
under the Sale Order and the related Repo Agreement. Because it is this element of the Sale that
directly affected Evergreen’s interests, Evergreen hereby joins in the Committee Motion and
asks this Court to reconsider the Sale Order.
They are all starting to see the true picture!
Coach T
