Lehman Brothers Financial SA (LEHNQ)

[cottonisking]

In summary, the CTs trustee BNYM could have taken drastic steps under the CTs "events of default" (For example: liquidate the trust and give the CT holders the debentures...), however, the BNYM chose to work with the Debtors to get us some money $$$$$.


************
With regard to the 7.90% Quarterly Income Preferred Securities, or QUIPS, and the related 7.90% Deferrable Interest Debentures, or Debentures, the Utility's filing of a Chapter 11 petition was an event of default under the applicable indenture. Pursuant to the related trust agreement, the trustee was required to take steps to liquidate the trust and distribute the Debentures to the QUIPS holders. Pursuant to the trustee's notice dated April 24, 2002, the trust was liquidated on May 24, 2002. Upon liquidation of the trust, the former holders of QUIPS received a like amount of 7.90% Deferrable Interest Subordinated Debentures, or QUIDS. As authorized by the bankruptcy court, starting in May 2002, the Utility made past-due and current interest payments on the QUIDS. The QUIDS were paid in full on the effective date of the Utility's Plan of Reorganization.

*** The QUIDS were not discharged on the Utility's Ch. 11 Plan Effective date, April 12, 2004. They were paid in full. LBHI has an IRS approved delay to discharge their debt (After all the POR stock distributions are finished or until substantially all of the Debtors assets are liquidated). WOW

http://www.sec.gov/Archives/edgar/data/1004980/000100498004000188/pge10q_q2.htm

********LEHNQ Prospectus*********

Indenture Events of Default

The indenture provides that the following are events of default relating to the junior subordinated debt securities:

•
failure to pay required interest on any debt security of such series for 30 days;


•
failure to pay principal or premium, if any, on any debt security of such series when due;


•
failure to make any required scheduled installment payment for 30 days on debt securities of such series;


•
failure to perform for 90 days after notice any other covenant in the relevant indenture other than a covenant included in the relevant indenture solely for the benefit of a series of debt securities other than such series;


•
certain events of bankruptcy or insolvency, whether voluntary or not; and


•
certain dissolutions of the related trust.

If any indenture event of default shall occur and be continuing, the property trustee, as the holder of the junior subordinated debt securities, will have the right to declare the principal of and the interest on the junior subordinated debt securities and any other amounts payable under the indenture to be immediately due and payable. An indenture event of default also constitutes a trust enforcement event. The holders of preferred securities in limited circumstances have the right to direct the property trustee to exercise its rights as the holder of the junior subordinated debt securities. See "Description of the Preferred Securities—Trust Enforcement Events" and "—Voting Rights."

Despite the foregoing, if a trust enforcement event has occurred and is continuing and such event is attributable to the failure of Lehman Brothers Holdings to pay interest or principal on the junior subordinated debt securities when such interest or principal is payable, Lehman Brothers Holdings acknowledges that, in such event, a holder of preferred securities may sue for payment. Lehman Brothers Holdings may not amend the indenture to remove this right to bring a direct action without the prior written consent of all of the holders of preferred securities.

http://www.sec.gov/Archives/edgar/data/806085/000104746905000357/a2149684z424b2.htm