Replies to post #49341 on Lehman Brothers Financial SA (LEHNQ)

[daisyxu]

Hey Cotton

Thanks for your efforts - let's keep fingers crossed and see what tidings October brings to CTS.

Have a nice weekend.

[lucmariepierre]

9.5-7=2.5

[solgari]

If that is the case, JPMCB held the money for CTs upto this moment and just waited until all senior creditor claims to be satisfied in full?

1.7b is not in dispute and JPMCB can redeem CTs directly without being a part of LBHI distribution?

[cottonisking]

JPMCB = CTs Guarantee Trustee, since 2003...

BNYM = CTs Property Trustee, hold the subordinate notes and issued the CTs (TRuPS)

Indenture Trustees = JPMCB & BNYM

Indenture Trustees = JPMCB & BNYM

Indenture Trustees = JPMCB & BNYM

the Second Circuit Court of Appeals in In re Quebecor Worldwide (USA), Inc., affirming bankruptcy court and district court decisions, found that section 546(e) protected the holders of notes and their indenture trustee from being required to give back millions of dollars in payments they had received from Quebecor Worldwide to repurchase their notes in the weeks leading up to its bankruptcy filing.

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United States: A Safe Harbor For Trustees And Bondholders: Using Section 546(E) To Protect Trustees And Bondholders From Avoidance Actions
Last Updated: October 22 2013
Article by Andrew E. Weissman
Drinker Biddle & Reath LLPDo you have Mutual Contacts with the Author


Section 546(e) of the Bankruptcy Code offers a strong defense for holders of bonds, notes and other securities to preference and fraudulent transfer actions brought in bankruptcy proceedings. Essentially, any payment made to settle or complete a securities transaction, including repurchases and redemptions of bonds, notes and debentures, is protected from avoidance under the Bankruptcy Code. For many years, however, this powerful defense was rarely used. When the defense was raised, it was usually in the context of protecting payments made in leveraged buy-outs. Bankruptcy courts were often hostile to the defense and narrowly interpreted the application of the defense to limit its use. Over the last several years, however, the use of the section 546 safe harbors has come to the forefront, as debtors and liquidating trustees have attempted to avoid commercial paper transactions and note redemptions, leveraged buyouts, and transfers made to customers from large brokerage and securities firms that have fallen into bankruptcy. The recent surge in the use of section 546 as a defense against these avoidance actions has allowed for appellate review and interpretation of the use of the defense. These courts have greatly expanded the use and application of the safe harbor defense and have found that the plain language of the statute protects a much wider range of securities transactions and securities contracts than bankruptcy courts had previously found. Most recently, the Second Circuit Court of Appeals in In re Quebecor Worldwide (USA), Inc., affirming bankruptcy court and district court decisions, found that section 546(e) protected the holders of notes and their indenture trustee from being required to give back millions of dollars in payments they had received from Quebecor Worldwide to repurchase their notes in the weeks leading up to its bankruptcy filing. This ruling, along with several other recent rulings, give trustees and bond holders a road map to protect payments received in connection with redemptions, repurchases and other restructurings of bonds, notes, debentures and other securities, from avoidance as a preference and from fraudulent transfer claims in the issuers' bankruptcies.

http://www.mondaq.com/unitedstates/x/270148/Insolvency+Bankruptcy/A+Safe+Harbor+For+Trustees+And+Bondholders+Using+Section+546E+To+Protect+Trustees+And+Bondholders+From+Avoidance+Actions

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JPMCB corresponding guarantee claim # 66462 against LBHI list the CTs in Exhibit C under Security Law claims.

U.S. Bankruptcy Judge James Peck said Lehman cannot claim money from JPMorgan for securities transactions governed by so- called safe harbor law, devised to protect banks dealing with weak companies. Lehman is entitled to pursue the remaining “complex and fact driven causes of action,” he said in a decision filed yesterday in Manhattan.

http://www.bloomberg.com/news/2012-04-19/jpmorgan-wins-narrowing-of-8-6-billion-lehman-lawsuit-1-.html