Lehman Brothers Financial SA (LEHNQ)

[stockmojo9]

Interesting.

Maybe this is one possible work out:

1. Out of $97B of assets on balance sheet, there is $15B "equity" if there is a complete liquidation without NOLs or paying Creditors.

2. $70B in NOLs represents $24.5B in tax savings at (35% tax rate) in a 49%-51% Debtor-Shareholder split.

3. So, $15B + $24.5 x (.49) = $27.01B for Debtors or 9.31% of Liabilities Subject to Compromise

4. And, $24.5 x (.51) = $12.5B for Creditors after all is liquidated.

But, here is a question: If the Debtors (Liability holders on LBHI balance sheet) can make more money agreeing to another 20% to 30% write down on their claims subject to compromise, why wouldn't they agree to do so?

What terms will they offer Creditors?

mojo