Lehman Brothers Financial SA (LEHNQ)

[marayatano]

Accredited Business Consolidators Slams Bank of N.Y. Mellon for 10% Loss From Sale of Lehman Bros. Assets - cbl By citybizlist Staff NEW YORK -- Accredited Business Consolidators Corp. (OTC Pink Sheets: ACDU) has slammed the Bank of New York Mellon, accusing the trustee of some Lehman Bros. debt of doing little to protect noteholders as it booked a loss of at least $800,000 by liquidating related assets, according to an 8-K filing with the U.S. Securities and Exchange Commission. "If Bank of New York Mellon, which serves as trustee for the Capital Trusts, was taking a more proactive role in protecting the rights of the noteholders, we would have been more comfortable in seeing the end result," the Doylestown-based firm said after it decided to not wait for uncertain bankruptcy proceedings to unfold and sold its assets at a loss of at least 10 percent. ACDU, as Accredited Business Consolidators refers to itself, last year formed Bankruptcy Claims Fund Inc., with its subsidiary, Italian Oven Financial Inc., as the majority owner. Bankruptcy Claims then bought some Lehman Bros. debt assets consisting of investments in trusts that held subordinate notes known as Capital Trusts for more than $8 million. Those shares traded publicly on the Pink Sheets under the ticker symbols LEHKQ, LEHLQ, LHHMQ and LEHNQ. ACDU also restructured those assets using favorable market conditions. But ACDU suffered a setback on March 15 when Lehman Bros., in its bankruptcy reorganization plan, proposed to treat holders of subordinate notes as unsecured creditors but transfer the funds to holders of senior unsecured notes and bonds. Under the circumstances, ACDU said, the only way for a Capital Trust stakeholder to receive any money would be for the senior notes to be paid at 100 percent of their face value during the liquidation process. ACDU believed it could claim payment guarantees if bankruptcy liquidation fell short of reimbursement to Capital Trust noteholders. However, the trustee, Bank of New York Mellon, contended that "the guarantee would only provide rights in the event a recovery is realized." Consequently, ACDU said, it was left with the choice of pursuing protracted and expensive court battles or of selling out and incurring a loss. It chose the latter, selling its Capital Trust assets for about 10 percent lower than the original investment.

HERE WAS A REPLY

Thank you for the excellent information This paragraph caught my eye in particular But ACDU suffered a setback on March 15 when Lehman Bros., in its bankruptcy reorganization plan, proposed to treat holders of subordinate notes as unsecured creditors but transfer the funds to holders of senior unsecured notes and bonds. Under the circumstances, ACDU said, the only way for a Capital Trust stakeholder to receive any money would be for the senior notes to be paid at 100 percent of their face value during the liquidation process. (Interesting that - despite the above - apparently they could sell their holdings for only a 10% drop in price)

Thanks for posting this, it jogged my memory a little more.

I remember, during this time period, there were communications, back and forth with IOVE. IOVE had attorneys look over the documentation re: CT and guarantees and decided to sell.

imo