Lehman Brothers Financial SA (LEHNQ)

[etzetrade]

IMHO, I think CTs could be recovered upto 9% of FV.

The market value of 53B NOLs is 53B x 35%(tax bracket) x 30% (investor is willing to pay) = 5.56B

If everything remains the same, A < L = 60B.

Assuming CTs don't get any distribution at all, CTs will share the residual value of LAMCO of 5.56B with other creditors of 60B.

In this case, CT will be treated equally as other creditors because CTs can't be wiped out. In other words, the substantive consolidation will apply here in order to preserve NOLs by CTs. Unfortunately, all common and preferrd equities are gone.

CTs' future = 5.56B/60B = 9.2% of FV.

Appreciate your comments, TIA