Replies to post #50808 on Lehman Brothers Financial SA (LEHNQ)

[camaro4me]

Interesting date.

Quote:
On October 1, 2014, LBHI and LOTC are expected to enter into an agreement for a $560 million loan from LOTC to LBHI to be secured by certain LBHI assets, such loan to mature on March 1, 2015. The proceeds from this loan agreement will be included in the sixth Plan Distribution.

[cottonisking]

Fruit for thought #2!


Per the POR section 8.13(c), the LOTC $560 million loan could have paid off the post petition interest for LOTC. The Debtors chose to loan the $560 in LOTC cash to LBHI.

Why?

1) To keep LBHI assets from liquidation or LBHI assets are too illiquid to monetize.

2) After LOTC pays off its post-petition interest the LBHI Plan Trust will show equity for the OBS and owe IRS taxes for year 2014. Delay IRS tax bill.

3) Achieve another goal or milestone

Did the Debtors breach the POR by taking LOTC cash for a $560 million LBHI loan, instead of paying off LOTC post petition interest? Time will tell the story!

I hope that the Debtors did the right thing for the LBHI Plan Trust equity interest holders. Keep those valuable LBHI assets for us!

*** Docket 46422 ***

08-13555-scc Doc 46422 Filed 10/01/14 Entered 10/01/14 18:10:33 Main Document


In accordance with section 8.13(c) of the Plan, to the extent that any Debtor has Available Cash, as defined in section 1.5 of the Plan, after all Allowed Claims against that Debtor have been satisfied in full, each holder of each such Allowed Claim shall be entitled to receive post-petition interest on the Allowed amount of such Claim. The Company has not recorded an estimate for post-petition interest in LOTC as of June 30, 2014.

On October 1, 2014, LBHI and LOTC are expected to enter into an agreement for a $560 million loan from LOTC to LBHI to be secured by certain LBHI assets, such loan to mature on March 1, 2015. The proceeds from this loan agreement will be included in the sixth Plan Distribution;