Replies to post #71603 on Lehman Brothers Financial SA (LEHNQ)

[toogoodfella]

>>>>>but that customers do not qualify as any of those." <<<<<<<
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There you go. I just said that Ct holders are customers and not an affiliate.

[cottonisking]

"Who are affiliates? "Under Rule 405 of the Securities Act,... whether through the ownership of voting securities, by contract, or otherwise."

*** 08-13555-jmp Doc 24851 Filed 02/01/12 Entered 02/01/12 16:18:12 Main Document ***

"Movants posited that
“affiliates,” especially in the context of a parent level guaranty, must mean corporations who
share controlling ownership and not contractual service advisor or trustee relationships."

***

Under Rule 405 of the Securities Act, an "affiliate" of or person "affiliated" with a specified person shall mean a person that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the person specified.
An individual's status as an affiliate is a fact-specific inquiry which must be determined by considering all relevant facts in accordance with Rule 405. The rule provides that the term "control" (including the terms "controlling," "controlled by" and "under common control with") means the possession, direct or indirect, of the power to direct or cause the direction of management and the policies of a person, whether through the ownership of voting securities, by contract, or otherwise. The SEC has stated that an individual's status as a director, officer, or 10% shareholder is one fact which must be taken into consideration in determining affiliate status (See American Standard, October 11, 1972). In addition, under Section 16(a) of the Exchange Act, every person who is directly or indirectly the owner of more than 10 percent of any class of any equity security that is registered under the Exchange Act, or who is a director or an officer of the issuer of such security, must file statements setting forth the amount of all equity securities of such issuer of which the filing person is a beneficial owner. These individuals usually are considered affiliates."

http://media.mofo.com/files/Uploads/Images/FAQRule144_145.pdf


***

08-13555-jmp Doc 24851 Filed 02/01/12 Entered 02/01/12 16:18:12 Main Document

"MOTION OF THE DEBTORS AND THE COMMITTEE, PURSUANT TO SECTIONS
105(A) AND 363 OF THE BANKRUPTCY CODE AND RULES 6004 AND 9019 OF THE
FEDERAL RULES OF BANKRUPTCY PROCEDURE, FOR APPROVAL OF THE
SETTLEMENT TRANSACTION RESOLVING THE TWO HUNDRED TWENTYNINTH
OMNIBUS OBJECTION TO JPMORGAN’S ASSET MANAGEMENT FUND
CLAIMS (NO LIABILITY, MISCLASSIFIED AND DUPLICATIVE CLAIMS)
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3. On or about September 22, 2009, the Funds filed over $710 million of
purportedly secured claims against LBHI on the basis that, as “affiliates” of JPMorgan Bank,
their claims were guaranteed by LBHI under the September Guaranty and secured by the
collateral posted by LBHI in connection therewith. The proofs of claim filed by the Funds
included claims for losses related to, among other things, bonds (including claims related to
contractually subordinated debt issued by LBHI), unsettled trades, cancelled trades, derivatives
unwinds, futures contracts, corporate actions and prime brokerage exposure.
4. On October 26, 2011, Movants filed the Claim Objection seeking a ruling
that the Funds were not “affiliates” of JPMorgan Bank and, thus, were not entitled to rely upon
the September Agreements as a basis for asserting secured claims against LBHI.1 The Funds
filed their opposition on December 16, 2011, and the Movants filed their reply on January 23,
2012.
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16. The Movants filed the Claim Objection on October 26, 2011 seeking a
ruling that the Funds were not “affiliates” of JPMorgan Bank, as that term is used in the
September Agreements, and thus were not entitled to rely upon such agreements as a basis for
asserting secured claims against LBHI.
17. As set forth in more detail in the Claim Objection, the Movants argued
that in light of the context of the September Agreements, it was overreaching in the extreme to
claim that the losses to customers of Funds advised by JPMorgan entities would be covered
under LBHI’s pre-bankruptcy guaranty. Movants argued that neither JPMorgan Chase & Co.
nor any of its subsidiaries share in the Funds’ profits and losses. Movants posited that
“affiliates,” especially in the context of a parent level guaranty, must mean corporations who
share controlling ownership and not contractual service advisor or trustee relationships.
Moreover, a conclusion that the Funds are “affiliates” of JPMorgan Bank would lead, in the
Movants’ view, to absurd results including elevating certain of the Funds’ claims based on
subordinated notes to fully secured claims. The Movants argued that this result is contrary to
specific indenture provisions governing the treatment of such subordinated notes and that it
would be inequitable for the Funds to receive 100% of their claim based on contractuallysubordinated debt while other holders of subordinated debt receive no recovery and senior debt
receives pennies on the dollar.
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***

GUARANTEE AGREEMENT

Lehman Brothers Holdings Capital Trust III

Dated as of March 17, 2003

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GUARANTEE AGREEMENT


This GUARANTEE AGREEMENT (the "Guarantee"), dated as of March 17, 2003, is executed and delivered by Lehman Brothers Holdings Inc., a Delaware corporation (the "Guarantor"), and JPMorgan Chase Bank, as trustee (the "Guarantee Trustee"), for the benefit of the Holders (as defined herein) from time to time of the Securities (as defined herein) of Lehman Brothers Holdings Capital Trust III, a Delaware statutory trust (the "Trust").
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"Affiliate" has the same meaning as given to that term in Rule 405 of the Securities Act of 1933, as amended, or any successor rule thereunder.

http://www.sec.gov/Archives/edgar/data/806085/000104746903008869/a2105775zex-4_05.htm

*** Old Post ***

"Lehman and its creditors argued that the 2008 agreement — which it said was "forced" upon it — allowed JPMorgan to apply the $8.6 billion in collateral to its affiliates, subsidiaries and successors, but that customers do not qualify as any of those."

http://www.law360.com/articles/305329/jpmorgan-to-return-700m-to-lehman-in-settlement


***

GUARANTEE TRUSTEE


3.1. Powers and Duties of Guarantee Trustee.

(a) This Guarantee shall be held by the Guarantee Trustee on behalf of the Trust for the benefit of the Holders of the Securities, and the Guarantee Trustee shall not transfer this Guarantee to any Person except a Holder of Securities exercising his or her rights pursuant to Section 5.4(b) or to a Successor Guarantee Trustee on acceptance by such Successor Guarantee Trustee of its appointment to act as Successor Guarantee Trustee. The right, title and interest of the Guarantee Trustee in and to this Guarantee shall automatically vest in any Successor Guarantee Trustee, and such vesting and succession of title shall be effective whether or not conveyance documents have been executed and delivered pursuant to the appointment of such Successor Guarantee Trustee.

(b) If a Guarantee Event of Default actually known to a Responsible Officer of the Guarantee Trustee has occurred and is continuing, the Guarantee Trustee shall enforce this Guarantee for the benefit of the Holders of the Securities.

(c) The Guarantee Trustee, before the occurrence of any Guarantee Event of Default and after the curing of all Guarantee Events of Default that may have occurred, shall undertake to perform only such duties as are specifically set forth in this Guarantee, and no implied covenants shall be read into this Guarantee against the Guarantee Trustee. In case a Guarantee Event of Default has occurred (that has not been cured or waived pursuant to Section 2.6) and is actually known to a Responsible Officer of the Guarantee Trustee, the Guarantee Trustee shall exercise such of the rights and powers vested in it by this Guarantee, and use the same degree of care and skill in its exercise thereof, as a

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prudent person would exercise or use under the circumstances in the conduct of his or her own affairs.

(d) No provision of this Guarantee shall be construed to relieve the Guarantee Trustee from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that:

(i) prior to the occurrence of any Guarantee Event of Default and after the curing or waiving of all such Guarantee Events of Default that may have occurred:

(A) the duties and obligations of the Guarantee Trustee shall be determined solely by the express provisions of this Guarantee, and the Guarantee Trustee shall not be liable except for the performance of such duties and obligations as are specifically set forth in this Guarantee, and no implied covenants or obligations shall be read into this Guarantee against the Guarantee Trustee; and

(B) in the absence of bad faith on the part of the Guarantee Trustee, the Guarantee Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificates or opinions furnished to the Guarantee Trustee and conforming to the requirements of this Guarantee; but in the case of any such certificates or opinions that by any provision hereof are specifically required to be furnished to the Guarantee Trustee, the Guarantee Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Guarantee;

(ii) the Guarantee Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer of the Guarantee Trustee, unless it shall be proved that the Guarantee Trustee was negligent in ascertaining the pertinent facts upon which such judgment was made;

(iii) the Guarantee Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Holders of not less than a Majority in Liquidation Amount of the Securities relating to the time, method and place of conducting any proceeding for any remedy available to the Guarantee Trustee, or exercising any trust or power conferred upon the Guarantee Trustee under this Guarantee; and

(iv) no provision of this Guarantee shall require the Guarantee Trustee to expend or risk its own funds or otherwise incur personal financial liability in the performance of any of its duties or in the exercise of any of its rights or powers, if the Guarantee Trustee shall have reasonable grounds for believing that

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the repayment of such funds or liability is not reasonably assured to it under the terms of this Guarantee or if the Guarantee Trustee shall have reasonable grounds for believing that an indemnity, reasonably satisfactory to the Guarantee Trustee, against such risk or liability is not reasonably assured to it under the terms of this Guarantee.


http://www.sec.gov/Archives/edgar/data/806085/000104746903008869/a2105775zex-4_05.htm

*** Old Post ***

LBHI's TRuPS = "(and their affiliates)"

I like this new BIG DADDY definition for NON-CDA CLAIMS:

"means claims filed on behalf of any affiliates of a JPMorgan Entity, or in which any
affiliates of a JPMorgan Entity has an interest, that are not Settled Matters, including without limitation claims filed by a JPMorgan Entity as agent, for a fund that it manages,and any other
claims that JPMorgan did not assert were covered by LBHI’s August and September 2008 guaranties and security agreements in favor of JPMCB’s subsidiaries and affiliates."

Note: JPMCB is the Transfer Agent for LEHLQ.

http://www.otcmarkets.com/research/service-provider/JPMorgan-Chase-Bank?id=2288



***

"In circumstances where JPMSI or an Affiliate was the lead managing underwrite, placement agent or the equivalent with respect to an offering of such securities, JPMSI and Affiliates also assert claims of the kind described in the preceding sentence against LBHI on behalf of all underwriters or placement agents in the underwriting or placement syndicate (and their affiliates) with respect to such offer."

LBHI's TRuPS = "(and their affiliates)"

*** Text from an Ihub board member old post that appears in claims 66462 (claims against LBHI) and 66455 (claims against LBSF) ***


Quote:
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Edit: This is what is in the claimS 66462 and 66455 dealing with the Securities Law Claims:

- JPMSI and its affiliates have contingent contractual and non-contractual indemity, contribution, equitable and other claims against LBHI for any losses, claims, damages or other liabilities (or actions in respect thereof). joint or several, to which JPMSI and its Affiliates may become subject under securities law or otherwise, including, without limitation, settlement costs, investigation costs and the fees and expenses from counsel arising from, based on or relating to the underwriting, placement and/or sale by JPMSI or its Affiliates of securities issued or guaranteed by LBHI. In circumstances where JPMSI or an Affiliate was the lead managing underwrite, placement agent or the equivalent with respect to an offering of such securities, JPMSI and Affiliates also assert claims of the kind described in the preceding sentence against LBHI on behalf of all underwriters or placement agents in the underwriting or placement syndicate (and their affiliates) with respect to such offer. In addition, JPMSI and its Affiliates, each as an entity that may be liable with LBHI to a creditor that has not filed a proof of claim, hereby files pursuant to Bankruptcy Rule 3005(a) a proof of claim on behalf of each such creditor covering claims with respect to which JPMSI and the Affiliate of JPMSI, as applicable, is a codebtor with LBHI. The name of each such creditor is not currently known.
- This filing is intended to include, without limitation, all Claims of the types described in the preceding paragraph, including, but not limited to, all such Claims related to the offerings described in Exhibit C.

- Exhibit C includes the 4 CTs as well as
- $1B 6.625% Notes due 2012 issued by LBHI
- $250M Medium Term Notes Series G maturity date 11/15/17
- $300M Series K CT
- 120K shares of Pref F stock
- $300M Series L CT
- $750M Medium Term Notes Series G maturity date 3/13/14
- $500M Medium Term Notes Series G maturity date 3/13/09
- $400M Series M CT
- $200M Series N CT
----------------------------------------------



*** LBHI AND JPMCB SETTLEMENT AGREEMENT DATED 2/1/2017 - Docket 54683

"Claims Allowance and CDA. JPMorgan’s Claim No. 66462 against LBHI will be
reduced, allowed in an amount consistent with the Settlement Payment and the
settlement of the LBSF Action, and the 492nd Omnibus Objection, as set forth in an
instruction letter (the “Instruction Letter”) to be submitted to the claims agent retained
in the Chapter 11 Cases: Epiq Systems Inc. (the “Claims Agent”), and deemed fully
satisfied because it had been previously fully satisfied pursuant to the Collateral
Disposition Agreement dated March 16, 2010 [ECF No. 7619] (as amended and
supplemented from time to time, the “CDA”). Claim Nos. 66474, 66452, 66455,
66465, 66466, 66468, 66469, and 66473 will be assigned to certain of the Lehman
Parties on a final basis and reconciled in amounts not to exceed $200 million, as set
forth in the Instruction Letter. All true-up and other remaining obligations of the
parties under the CDA will be terminated and discharged.
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“Settled Matters” means any and all Actions between the parties, including
without limitation, any and all Actions relating to the matters, facts and circumstances
described in, or arising from, or related in any way to any of the matters, facts and
circumstances underlying or related to the Actions and CDA Obligations described in
paragraphs C through H of the Background section of this Settlement Agreement, other
than the Unaffected Matters. For the avoidance of doubt, the Settled Matters include,
without limitation, the Tassimo Action, the LBSF Action, the 492nd Omnibus Objection,
the Securities Lending Objection, and the CDA Obligations, but exclude the Unaffected
Matters.



“Unaffected Matters” means claims filed by or on behalf of any JPMorgan Entity
or any affiliates or funds of a JPMorgan Entity, or in which any JPMorgan Entity or any
affiliates or funds of a JPMorgan Entity has an interest, that are not Settled Matters,
including without limitation claims filed by or on behalf of a JPMorgan Entity as agent,
for a customer or for a fund that it manages, claims relating to Canary Wharf, claims held
from time to time by a JPMorgan Entity’s distressed claims trading desk, and any other
claims that JPMorgan did not assert were covered by LBHI’s August and September
2008 guaranties and security agreements in favor of JPMCB’s subsidiaries and affiliates.

For the avoidance of doubt, claims relating to the LBSF Action are not Unaffected
Matters. Lehman reserves all objections and defenses to the Unaffected Matters."

***

Quote:
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GUARANTEE AGREEMENT


This GUARANTEE AGREEMENT (the "Guarantee"), dated as of March 17, 2003, is executed and delivered by Lehman Brothers Holdings Inc., a Delaware corporation (the "Guarantor"), and JPMorgan Chase Bank, as trustee (the "Guarantee Trustee"), for the benefit of the Holders (as defined herein) from time to time of the Securities (as defined herein) of Lehman Brothers Holdings Capital Trust III, a Delaware statutory trust (the "Trust").
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2.10. Guarantee Trustee May File Proofs of Claim. Upon the occurrence of a Guarantee Event of Default, the Guarantee Trustee is hereby authorized to (a) recover judgment, in its own name and as trustee of an express trust, against the Guarantor for the whole amount of any Guarantee Payments remaining unpaid and (b) file such proofs of claim and other papers or documents as may be necessary or advisable in order to have its claims and those of the Holders of the Securities allowed in any judicial proceedings relative to the Guarantor, its creditors or its property.
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http://www.sec.gov/Archives/edgar/data/806085/000104746903008869/a2105775zex-4_05.htm