Lehman Brothers Holdings Capital Trust III (LEHKQ)

[marayatano]

When I spoke to you yesterday, I was at work (as I am now, which limits my time to look through documents - I do not the spare time you seem to have an abundance of). When I got home, I noticed that there were THREE (3) sub classes (not counting the guarantee, etc.). Senior sub, sub and PIERS. My assumption was that there were only TWO (2) subs. I didn't realize there was a senior sub included in WMI (my fault for not reviewing it and see that there were more Classes of Subs. other than the 2). WMI's POR contains WMB claims that do not even belong there and warrants. Was going to post this today regarding same, but time constraints rule while working.

Anyhow, the main point is that you cannot follow the numbers next to the word "Class". Not all BKs are the same. There will be some classes that are ranked equally BUT have (Example) Class 3 assigned and have Class 4 assigned. Just because the number 3 is above the number 4, does not make it senior in priority. That is the portion you need to understand.

Look at Lehman's POR (although they never released a Disclosure Statement) as an example. You have Class 7 higher than Class 5 in priority. Just because you are in Class 5 does not mean you get paid before Class 7.

All bk follow a general hierarchy. You need to know this before you look at a POR and try to interpret it. <--- When you are able to understand this, then EVERYTHING will become CLEAR as day to you.

Your conversation with the Trustee regarding Lehman (Which I do NOT agree): Class 4 and Class 5 are equal if there were no Class 3. Your basically saying a subordinate class is equal to a senior class which I do not agree.


There is much more to this, but rather not get into it.

Happy Easter.

imo

I suggest you go back and review the POR for WMI which says that Class 17 - Subordinate Claims - cannot receive any payments until all other Claims are paid in full.


It is only logical that a POR is going to list the Classes in numerical order of priority of payouts.


If Class 3 did not exist and there was no subordinate prospectus/guarantee then Class 5 would be equal to Class 4.


However - it appears that under "SUBORDINATION" in the Bankruptcy Code that Subordinate Claims are also subordinate to Claims that are senior to and equal to the Claim and that is why Class 4 is ahead of Class 5 for distributions.

.