Replies to post #51019 on Lehman Brothers Financial SA (LEHNQ)

[toogoodfella]

This is a very good information Cotton.

[toogoodfella]

With this information, I can imagine now that the stay is preventing the involuntary case against LEHMAN.

IMO, it will end into agreement rather than a cash acceleration if LBHI is planning to emerge into a new business in order to preserve its remaining asset. The negotiation will be to include the 10-B claim in the capitalization and be paid with a relevant amount of shares. The agreement will therefore based on the agreed price. In this case, I still expect a FV plus interest in relevant stocks. ALL IMO.

IMO, the information made me more optimistic with Cts because I think that it is JPM that is more in control of this case against LBHI. While LBHI is trying to avoid it by extending the stay until negotiation is complete.

[jwnoble3]

Cotton,
Are you thinking the CTs could force chap 7 after the stay is lifted? The trust is non-debtor and still intact.

[cottonisking]

Everyone on this board should wait and see how District Judge Richard Sullivan allocate the $6.9 Billion in LBHI cash held by JPMCB. There is no need to guess at this point in the Lehman Brothers bankruptcy!


I included the Trapeza Capital Management case below in my first letter to District Judge Richard Sullivan (See order 60 case 11-cv-06760-RJS):

NEW YORK, Sep 09, 2014 (BUSINESS WIRE) -- A court decision last week in favor of Trapeza Capital Management, LLC is positive for holders of trust-preferred collateralized debt obligations (TruPS CDOs), Fitch Ratings says. The court decided not to dismiss the Chapter 7 involuntary bankruptcy Trapeza filed against FMB Bancshares in June as requested by the bank.

The judge in this case stated that the terms of the indenture and amended trust agreement give Trapeza the right, as the sole creditor, to force liquidation of the subsidiary bank as an option to remedy a default on the note. Although FMB is legally prohibited from making any distributions of interest or principal on trust-preferred securities without prior approval of the Federal Reserve, as indicated by the regulatory enforcement agreement, it still has the legal duty to satisfy the contractual obligations to Trapeza. The fact that FMB cannot make any payment on its debt to Trapeza does not waive its legal duty to pay.

******


Dear Hon. Richard Sullivan:

You may find the information below useful in the LBHI versus JPMCB case: No. 11-cv-6760 (RJS).

The LBHI TRuPS holders are waiting to get paid from JPMCB collateral ($6.9 billion lien via safe harbor 546(E)) before it is spent by JPMCB or returned to LBHI. Everyone else, professionals and other creditors, are being paid much more than they expected from the Lehman Brothers bankruptcy.

Regards,
xxxxx xxxxx


Exhibit A

United States: A Safe Harbor For Trustees And Bondholders: Using Section 546(E) To Protect Trustees And Bondholders From Avoidance Actions
.
.
.
What Should Trustees and Holders of Notes, Bonds and Debentures Do?
When there has been a default under a note, debenture or bond indenture, trustees should be wary of accepting late payments. Payments made on time in accordance with the terms of the indenture will likely not be avoidable as a preference because they are payments made in the ordinary course of business. If there has been a default and a payment has been missed, creditors and trustees should consider structuring the workout and repayment of the defaulted notes as a purchase, repurchase or redemption of the notes. Payments should flow through the trustee so that a financial institution is involved in the transaction. An agreement for the purchase or redemption of the notes should be executed. If those steps are followed, the payment from the debtor would likely be a settlement payment from its bank to the trustee, both financial institutions, and the payment would complete a securities transaction, the purchase or redemption of a security. Under these circumstances, there is a good chance a court would be required to apply the safe harbor of section 546(e) to the transaction and exempt the transfer from avoidance under section 546(e)

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




*** Docket 26996 ***

08-13555-jmp Doc 26996 Filed 03/19/12 Entered 03/19/12 07:50:51 Main Document


The final estimate prepared by the Claims Appraiser(s) shall be conclusive and binding for all
purposes under the ICP.
For purposes of measuring performance under the ICP, “POR Value” shall mean $53.043 billion.
For purposes of measuring performance under the ICP, Claims Benchmark shall mean $299.8 billion.



LBHI DIRECTOR INCENTIVE COMPENSATION PLAN (“ICP”)
.
.
.
A Director’s ICP Participation in each applicable year is equal to 1/7th of the
Incentive Pool for such year. The Incentive Pool for each applicable year is equal to
the product of (A) the excess of (i) the amount determined pursuant to Table 1 below
based on the amount of all Unsecured Recoveries realized during or prior to such year
over (ii) the amount determined pursuant to Table 1 below based only on the amount
of Unsecured Recoveries realized prior to such year multiplied by (B) the Speed-of-
Distributions Multiplier determined under Table 2 below based upon date on which
each respective realization of Unsecured Recoveries occurs.
Table 1 – ICP Benchmark Amount (Based on Cumulative Unsecured Recoveries):
? 1.32 bps for achieving the POR Value;
? 17 bps for the next $10 billion of Unsecured Recovery;
? 44 bps for the next $5 billion of Unsecured Recovery;
? 48 bps for the next $5 billion of Unsecured Recovery; and
? .50% of the amount of any additional Unsecured Recovery.
Aggregate ICP Benchmark amounts are interpolated on a straight-line basis for
Unsecured Recovery from $0 to POR Value and within each of the subsequent
three recovery bands

*** Asset Management Incentive Fee Docket 29165***

2. A portion of the Incentive Fee will be determined by reference to the value of
Unsecured Distributions (as defined below). The Debtors, and any successors thereof, shall pay and distribute to Alvarez & Marsal an Incentive Fee equal to
0.175% (17.5 bps) of all Unsecured Distributions greater than $15 billion.

3. As used herein, the term “Unsecured Distributions” shall mean any consideration
or distribution of any kind or in any form whatsoever paid to, or received or retained
by, any unsecured creditor of any Debtor or Non-Debtor affiliate of a Debtor (“Non-
Debtor”), or to any reserve or escrow for the benefit of any allowed, disputed or
contingent unsecured claim against any Debtor or Non-Debtor, whether distributed
pursuant to a plan of reorganization, a plan of liquidation, as an interim or other
distribution during the administration of these Chapter 11 cases, or as otherwise
distributed following the termination, dismissal or conversion of all or any of these
Chapter 11 cases to one or more cases under Chapter 7 of the Bankruptcy Code or
otherwise.
.
.
.
$ 7 4,238.92 $ (19,939.60) $ ( 793.57) $ 5 3,505.74 $ (23,344.94) $ 3 0,160.81
Asset Management Incentive Fee Percentage 0.175%
Estimated Remaining Asset Management Incentive Fee Calculation $ 52.78 1
Estimated Total Asset Management Incentive Fee $ 67.39
1 These amounts are estimated based on information currently available to Alvarez & Marsal. The substantial services for which Alvarez & Marsal has earned the
Asset Management Incentive Fee were provided prior to the Effective Date. In addition, certain post-Effective Date services are being provided by Alvarez &
Marsal in order to facilitate final distributions. The amount of those distributions will enable final calculation of the total Asset Management Incentive Fee,
which will be calculated and paid in accordance with the Incentive Fee percentage and the final distribution amount. Therefore, the final Asset Management
Incentive Fee may be more or less than the estimates herein.

*** LBHI/Barclays Capital Asset Purchase Agreement ***

Quote:
--------------------------------------------------------------------------------
ASSET PURCHASE AGREEMENT
AMONG
LEHMAN BROTHERS HOLDINGS INC.
LB 745 LLC
AND
BARCLAYS CAPITAL INC.

Dated as of September 16, 2008

.
.
.
.

2.4 Excluded Liabilities

(a)

(b)

(c)

(d)

(e) all Liabilities relating to amounts required to be paid by Seller, hereunder, including upon any breach;

(f)

(g)

page 12 of 42
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*** Docket 3596 ***


Quote:
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3596 05/18/2009 Application for FRBP 2004 Examination Motion of Debtor and Debtor in Possession for an Order, Pursuant to Fed. R. Bankr. P. 2004, Authorizing Discovery from Barclays Capital, Inc. filed by Benjamin Rosenblum on behalf of Lehman Brothers Holdings Inc.. with hearing to be held on 6/3/2009 at 10:00 AM at Courtroom 601 (JMP) Responses due by 5/29/2009, (Attachments: # (1) Exhibits A-G) (Rosenblum, Benjamin)


Case: Lehman Brothers Holdings Inc.


Related: none Documents
Main Document Exhibits A-G

***

2. Since the completion of this expedited negotiation and sale of one of the
largest investment banks in the world, the Debtor has become aware of apparent material
discrepancies relating to the liabilities Barclays was to assume and the benefits LBHI (or related
entities) was to receive under this and related transactions. As noted below, these apparent
discrepancies concern, inter alia, Barclays’ obligation to pay employee bonuses and certain
contract cure amounts (both of which materially impacted the value of the sale) as well as to
certain asset transfers related to repurchase transactions conducted during the week the Sale
Transaction was negotiated. In the aggregate, these apparent discrepancies may have resulted in
a windfall to Barclays at the expense of the estate, its creditors and other parties in interest, in an
amount that could reach into the billions of dollars. As a result, the Debtor now seeks discovery
from Barclays to enable the estate to properly review these issues and determine Debtor’s rights
and obligations (and to assess whether it may have claims) under these transactions.
.
.
.
17. Second, this Court’s approval of the Sale Transaction was premised on
Barclays’ undertaking an obligation to pay certain contract “cure” amounts described as being in
the range of $1.5-$2.25 billion. The above-referenced financial statement listed the accrual for
such “cures” at $2.25 billion (see Exhibit A hereto), although for some reason (not yet clear to
the Debtor) a $1.5 billion figure was presented to the Court during the Sale Motion. (See 9/19/08
Hearing Tr. at 101:1-4; see also 9/17/09 Hearing Tr. at 23:5-24:8) Either way, there appears to
be a large discrepancy between these stated amounts and the actual “cure” costs ultimately paid
by Barclays. Indeed, the closing date contract cure amounts publicly posted on September 19th
and October 1st were in the range of only $100-$200 million. And based on Debtor’s
preliminary analysis it appears that Barclays has paid slightly more than $200 million (as of
2/24/09) in contract cure costs. The requested discovery seeks information relating to this
apparent material discrepancy concerning the consideration Barclays was to have given in the
Sale Transaction.
.
.
.
29. Thus, over three months have passed since the Debtor first requested
information from Barclays about these matters and Barclays has produced nothing to date.
Accordingly, the Debtor files this motion as this is the most efficient means for moving this
discovery ahead.
--------------------------------------------------------------------------------




*** News Article ***

Lehman to Pay Barclays $6 Million for Its Own Chairs (Update1)
By Linda Sandler and Christopher Scinta - June 12, 2009 11:27 EDT

Barclays Capital logos are displayed
June 12 (Bloomberg) -- Lehman Brothers Holdings Inc., nine months after selling its brokerage to Barclays Plc while in bankruptcy, is still in disputes with the British bank over who owns what, including the investment bank’s own furniture.

Lehman, once the fourth-largest investment bank, asked a bankruptcy judge in New York last week to let it pay Barclays $5.9 million to buy back desks, chairs, tables, cubicles, audio-video equipment and security paraphernalia it currently uses in a building at 1271 Avenue of the Americas in Manhattan.

The repurchase is necessary because “Barclays has asserted that certain of the office furniture, fixtures and equipment that is located in the building and used by the debtors was previously sold to Barclays,” Lehman said in a June 4 filing in U.S. Bankruptcy Court in New York.

The New York-based investment bank’s disputes with Barclays have ranged from whether the liabilities assumed by Barclays were less than what the parties assumed in setting the purchase price to who owns Lehman-logoed umbrellas.

Lehman, which filed the biggest bankruptcy in U.S. history in September with assets of $639 billion, is trying to cut its overhead including lease costs as it liquidates. Its landlord has agreed to cut Lehman’s rent by $305 million to $21 million on an existing lease, partly in exchange for getting the furniture, according to the filing. Lehman first has to buy it back from Barclays, the third-biggest U.K. bank by assets.

The lease will be shortened and Lehman will rent less space under the proposed arrangement, a court filing shows.

Peter Truell, a Barclays spokesman, declined to comment, as did Kimberly Macleod, a Lehman spokeswoman.

Windfall Profit?

Last month, Lehman, which has an estimated $200 billion in unsecured liabilities left to pay, asked the bankruptcy judge to investigate whether Barclays made a windfall profit when it bought Lehman’s brokerage unit and real estate for $1.54 billion just days after the securities firm filed for bankruptcy.

The firm “has become aware of apparent material discrepancies relating to the liabilities Barclays was to assume,” Lehman said in a May 18 court filing. “These apparent discrepancies may have resulted in a windfall to Barclays at the expense of the estate, its creditors and other parties in interest, in an amount that could reach into the billions of dollars.”

As part of the acquisition, Barclays received almost $4 billion in securities and cash from Lehman to pay liabilities such as equipment leases, severance and bonuses, said a person familiar with the matter who declined to be named. Later, when Barclays announced its financial results for 2008, the bank said it recorded a gain of 2.26 billion pounds ($3.75 billion) from the acquisition of Lehman’s North American operations, according to the court filing.

Lehman’s Liabilities

The bank may have paid only some of Lehman’s liabilities that it undertook to pay, or the liabilities may have been smaller than originally estimated, the person said. If so, Lehman wants its money back, the person said.

Lehman Chief Executive Officer Bryan Marsal wrote to Barclays in March, asking the bank to explain how it made a profit on the purchase.

Lehman must pay for the furniture “within three business days” of court approval of the purchase, and Barclays afterward “shall have no obligation to repair or restore” any of the items, according to a June 4 Barclays letter filed in court.

Cables, Wires

Lehman will regain ownership of its cables, wires and other “improvements” for just $1, with $3 million going for information technology equipment and $2.9 million for tables, desks and chairs, according to court papers.

In an earlier skirmish over chairs, resolved in May, Barclays won the right to carry off as many as 150 of Lehman’s chairs in a building at 399 Park Avenue where they both rent space. The bankrupt firm promised the landlord to replace them with seating of “reasonably similar quality and condition,” according to court papers.

Barclays said in a court filing that Lehman’s request for more information on the brokerage purchase “amounts to a wholesale attack on this court’s order approving the sale” in September. “This court specifically found that the consideration was fair, and that the transaction was entered into in good faith and was in the interest of the estate,” a June 5 filing said.

In December, Marsal said creditors might have recovered $50 billion to $75 billion more if Lehman had been wound down in an orderly way instead of hurriedly filing for court protection.

A hearing on the request to pay Barclays for the furniture and to probe the brokerage sale is scheduled for June 24 before U.S. Bankruptcy Judge James Peck.

The case is In re Lehman Brothers Holdings Inc., 08-13555, U.S. Bankruptcy Court, Southern District of New York (Manhattan).

To contact the reporters on this story: Christopher Scinta in New York bankruptcy court at [e-mail]; Linda Sandler in New York at [e-mail].

To contact the editor responsible for this story: David E. Rovella at [e-mail].

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=az4FxP1gjZB0


***lehman-brothers-v.-barclays-capital-adversary-complaint-bankr.-s.d.n.y.-case-no.-09-01731-filed-november-16-2009***


Quote:

--------------------------------------------------------------------------------

COUNT I
Aiding and Abetting Breach of Fiduciary Duty


81. The Lehman officers’ breaches of duty, and Barclays’ participation in, and
aiding and abetting of, such breaches, caused Lehman, and ultimately its creditors, to suffer
damages, in an amount to be determined at trial. Such damages include, but are not limited to:
(i) the difference between the $4.25 billion in employee compensation and contract cure
liabilities Barclays was supposed to assume under the Asset Purchase Agreement and the amount
of such liabilities it actually paid upon closing the Sale Transaction; (ii) the $5 to $7 billion in
excess collateral that Barclays received through the September 18 Repurchase Agreement and
Clarification Letter; and (iii) the value of all other additional assets transferred to Barclays over
and above those approved by the Court.

--------------------------------------------------------------------------------




http://insuranceclaimsbadfaith.typepad.com/files/lehman-brothers-v.-barclays-capital-adversary-complaint-bankr.-s.d.n.y.-case-no.-09-01731-filed-november-16-2009.pdf

[wayne49]

Cotton, you should forward this to our trustee ;)

[camaro4me]

Righto, no class change, the prescident is principal and interest due immediately, no dripping it to us a little at a time.

Thereafter, on March 30, 2014, FMB went into default on the Debentures for failure to pay interest when due and also defaulted on its obligations under the TruPS. On April 7, 2014, Trapeza CDO XII, LTD (Trapeza) provided FMB and the Trustee with written notice that — in accordance with the terms of the applicable indenture — it was accelerating all amounts due under the Debentures and that all principal and interest thereunder was due immediately.