Here is another example of how the Lehman assets are benefiting from an inproving market. You have to read LBHI Docket #6713. Basically, LBHI wants to invest $394M in Trusts VFT-2007 and VFT-2008 to prepay the obilgations and save money on financing and extend the time to sell the notes.
Here is an excerpt...remember the last balance sheet was only to June 30, 2009. We know the market bottomed two months before this balance sheet was calculated. How many of these trust/assets of the $272B total LBHI controlled entities will benefit like these trusts have?
22. LCPI has determined, in the sound exercise of its business judgment, that
the Prepayment is in the best interests of its estates and creditors. The Prepayment is the best
framework for continuing to maximizing the value of the Collateral in the Trusts without
incurring excess financing costs. The Settlement has provided LCPI with time to benefit from a
stabilization of the financial markets. Since entry into the Settlement, the value of the Collateral
has increased such that it is now greater than the amounts owed by the Trusts to MetLife.
Nevertheless, the Debtors believe that the Collateral continues to have value, and consequently,
that LCPI and its estate may ultimately realize an even greater recovery from its interests in the
Trusts. While LCPI will provide the Trusts with the aggregate amount of no greater than
approximately $394 million and cause each of the Trusts to payoff the Notes, such actions will
protect the Trusts’ interests in the Collateral by effecting a release of the Collateral in accordance
with the Amended Transaction Documents. The Debtors will also be able to sell or restructure
the Mortgage Loans and Corporate Loans in accordance with the Bankruptcy Code and the prior
orders entered by the Court without seeking additional consents from MetLife.
23. LCPI believes that the Prepayment is fair and reasonable under the
circumstances. In addition to protecting the valuable Collateral pledged by the Trusts, such
actions will allow LCPI to cease using the amounts repaid by the borrowers under the Collateral
to pay down the 2007 Notes and the 2008 Notes, which accrue interest at the rates of LIBOR
plus 7% and LIBOR plus 4.5%, respectively. As a result, LCPI will save up to over $12 million
in financing costs. With respect to the 2007 Notes, LCPI will no longer face the risk that it will
also be forced to use the additional cash of its estate to finance the interest payments owing to
MetLife.
Coach T
