Market Data 
Markets
Replies to post #115521 on Lehman Brothers Financial SA (LEHNQ)
11/13/25 8:00 AM
Progress made in the Reporting
Period and in the subsequent
period to 8 October 2025
Preferred equity distributions
Following progress made in the Reporting Period, including the sale of LBIE’s residual assets to LBH, and 🆘substantial
recovery of c.$50.1m from the IRS (equivalent of c.£37m), the Directors proposed, in consultation with the Administrators, that
the Company make a further distribution of c.£53.6m by way of a preferred equity dividend payable to LBHI2 as the sole
holder of LBIE’s preferred equity. This dividend was paid on 4 September 2025.
The Administrators considered that the dividend was appropriate on the basis that funds could properly be paid to the
Shareholder from distributable reserves and were not required for any other purpose. Total preferred equity distributions to
LBHI2 during the course of the administration total c.£551.6m.
Eldon Street Holdings Limited (“ESH”) - in administration
During the Reporting Period the Administrators accepted a proposed settlement offer of c.£0.3m from the administrators of
ESH in full and final settlement of LBIE’s unsecured claim of c.£5.4m and Mable’s unsecured claim of c.£7.1m which had been
assigned to the Company. Total recoveries in respect of these claims equate to 53% of the value of the combined claims.
Overseas litigation - security for costs
In the Reporting Period, c.€1.5m was released back to the Company in respect of security for costs in an overseas litigation.
MCF
As set out in our previous report, LBIE exercised its option to purchase MCF’s claim into LBHI for a nominal amount in
accordance with the terms of the compromise agreement with MCF’s creditors signed in April 2021, allowing the Joint
Administrators of MCF to proceed to closure of MCF’s administration. The MCF administration was closed on 4 April 2025 and
the company was dissolved on 14 July 2025.
Recovery from IRS
As set out in previous reports, the IRS approved LBIE’s request for treaty benefits through the competent authority process in
August 2021 allowing recovery of taxes and associated interest. Tax returns were filed with the IRS in Q4 2021.
🆘During the Reporting Period, the Company recovered c.$50.1m (c.£37m) from the IRS, representing a substantial proportion
of the reclaim. Of the c.$50.1m LBIE received from the IRS, c.$45.3m represented the principal amount claimed and the
balance related to associated interest. This represents a lower amount than LBIE anticipated and claims have been submitted
to the IRS for the🆘 remaining balance of c.$11.7m. On 4 September 2025, the Company distributed the amount received from
the IRS as part of the preferred equity distribution mentioned above.
Other potential recoveries
As advised in the last report, LBIE has a claim in an overseas liquidation, of which LBIE continues to be a member of their
liquidation committee. No further recoveries have been received during this Reporting Period or prior to the end of the
administration. This residual asset was sold to LBH on 3 September 2025, with the value being based on estimated future
recoveries.
The Administrators have also continued to pursue a potential recovery relating to a 50% holding of a claim in an overseas
bankruptcy. Ownership of this claim has also been assigned to LBH, with the sale value being calculated using market prices
for the sale of similar claims, together with recovery of costs. Whilst the assignment is valid as a matter of English law, in order
to effect a full transfer of the claim to LBH within the overseas jurisdiction, the bankruptcy trustee must consent to the
assignment of the claim which may take some time. To that end, work to complete the transfer of this claim to LBH will
continue in the MVL process.
Joint Administrators’ combined progress and final report | PwC | 4
A distribution was declared in May 2025, which was due to be paid in July 2025 with recoveries to LBIE of c.£8.75m, subject
to no objections being received. Following receipt of objections from various creditors, this distribution is now not expected to
be made any earlier than December 2025. This distribution was fully reflected in the sale price to LBH. Should it or any further
distributions be made prior to the transfer being fully completed, this will be made to LBIE and transferred immediately to LBH
as owner of the claim.
Sale of residual assets to LBH
As explained in our previous report, recoveries attributable to LBIE’s small number of remaining assets were not anticipated to
have been received before the expiry of the administration on 30 November 2025. We have not sought an extension to the
administration as all creditor claims have been paid.
As LBH is the UK group entity expected to remain in administration for the longest period, the Administrators agreed to sell the
remaining assets of the Company, with the exception of its claim for interest from the IRS, to LBH at current market value for
their aggregate value of c.£16.5m and this transaction was executed on 3 September 2025. On 4 September, the Company
distributed the sale proceeds to LBHI2 as the sole holder of LBIE’s preferred equity as part of the preferred equity distribution
mentioned above.
Connected parties
As mentioned above, and prior to entering into the connected party transaction with LBH, the Administrators undertook a
thorough assessment of all available options, including, where appropriate, potential sale of residual assets to alternative
parties, with the objective of protecting value for LBIE’s stakeholders, whilst allowing the closure of the administration to
proceed. A comprehensive valuation pack was produced to support the sale values, using independent market
information/sources where possible. Throughout this process, the Operating Committee was kept fully informed, and provided
approval for the transaction to proceed.
Following the Operating Committee’s formal approval for LBIE to enter into agreements with LBH, the sale of LBIE’s residual
assets to LBH was completed for cash consideration of c.£16.5m based on the Administrators’ valuation.
Tax
Our tax team has continued to manage LBIE’s tax position, ensuring that all necessary tax filing obligations have been met.
The Administrators have met their obligations under the Senior Accounting Officer ("SAO") legislation and are no longer
required to submit the certification and notification. They have complied with their obligations regarding the Lehman Group tax
strategy which is no longer required to be published. They have adhered to the UK and US Foreign Account Tax Compliance
Act and Common Reporting Standards.
Specific progress in the reporting period includes:
? Submission of LBIE’s corporation tax return for the year ending 14 September 2024 on 19 August 2025;
? Preparation of the draft LBIE tax return for the year ending 14 September 2025;
? Recovery of £1.8m paid on account in respect of potential corporation tax to HMRC in March 2023;
? Recovery of c.$50.1m (including interest) of US tax for years 2009-2015, following competent authority approval from
the IRS (as mentioned above);
? Work in respect of the transfer of assets from LBIE to LBH; and
? Surrender of 2023 tax losses to SPML & PML resulting in value to LBIE of c.£0.8m.
VAT
All VAT returns have been submitted up to, and including, the quarter ending 31 August 2025.
Conclusion of the administration
The Administrators have continued to work to wind-down the remaining LBIE infrastructure and concluded various
administrative and operational matters required to enable the end of the administration and move into solvent liquidation. This
included the preparation of the statement of assets and liabilities to be appended to the declaration of solvency, enabling the
directors to provide the required confirmation that LBIE is solvent and to recommend to LBIE’s shareholder, LBHI2 that the
Company should be placed into MVL. The declaration of solvency was signed by the Directors before a notary public.
In advance of the High Court hearing held on 8 October 2025 before Justice Hildyard, the Administrators worked closely with
their legal and tax advisers to finalise all necessary court evidence in support of their application for an order ending the
Joint Administrators’ combined progress and final report | PwC | 5
AI
