Replies to post #116060 on Lehman Brothers Financial SA (LEHNQ)

[BBANBOB]

COTTON

"" My broker can no longer go back as far as 2012.""

They can they just won't or don't

[cottonisking]

I own LBHI's capital trust preferred securities listed below. Based on the language below, how does LBH plc s June 9, 2005 Board of Directors Guaranteed (with successor rights) apply to my Securities?


+7
Based on the provided information regarding Lehman Brothers Holdings Inc. (LBHI) capital trust preferred securities, here is how the guarantee and successor rights apply:
1. Nature of the Guarantee (June 2005 / General Structure)
Irrevocable Guarantee: LBHI (the "Guarantor") provided a full and unconditional guarantee on a subordinated basis for payments of distributions and redemption prices on the preferred securities, provided the trust has funds available.
Rank: The guarantee ranks subordinate to all senior debt of LBHI, but senior to LBHI common stock.
Direct Enforcement: If LBHI fails to make a guarantee payment, holders of the trust preferred securities can take direct legal action against LBHI.
Justia
Justia
+2
2. Application of Successor Rights
Binding on Successors: The guarantee agreement specifically states that all guarantees and agreements bind the "successors, assigns, receivers, trustees and representatives" of the Guarantor.
Bankruptcy & Liquidation: Due to the bankruptcy (Chapter 11) of LBHI, the guarantee obligations passed to the reorganized entity or were managed by the bankruptcy court. The guarantee claims against LBHI were subjected to a cap under the Third Amended Joint Chapter 11 Plan.
Ownership of Rights: If you held securities issued by Lehman Brothers Holdings Capital Trusts III, IV, V, or VI, your claim was against the trust, backed by the guarantee from LBHI.
Katten Muchin Rosenman LLP
Katten Muchin Rosenman LLP
+2
3. Application to Your Securities
Subordinated Claim Status: Following the September 15, 2008, bankruptcy filing, the guarantee meant holders of preferred securities were subordinated creditors of LBHI.
Limited Recovery: In the context of the bankruptcy, claims under these guarantees were highly subordinated. Most trust preferred security holders did not receive full payment. The bankruptcy estate developed plans where these claims were classified and paid based on available assets.
Final Distributions: The Bankruptcy Court approved a "Final Distribution" process, and your claim under the 2005 guarantee would have been addressed within this, often resulting in receiving a small percentage of the original liquidation value.
Epiq
Epiq
+2
In summary: The 2005 guarantee (with successor rights) solidified your position as a beneficiary of a subordinated, yet direct, obligation from LBHI. Following the bankruptcy, this meant your claims against LBHI were prioritized below senior debt but above equity holders, with final, likely partial, payments made through the Chapter 11 trustee.

I own LBHI's capital trust preferred securities listed below. Based on the language below, how similar are my Securities to lbh plc's ecaps?



+9
Based on the provided information, your LBHI Capital Trust Preferred Securities and the LBH plc ECAPS (Enhanced Capital Advantaged Preferred Securities) share high structural similarity in that both were designed as hybrid instruments representing ultimate exposure to subordinated debt issued by Lehman Brothers entities, and both were subject to the same bankruptcy and liquidation proceedings.
ACIC American College of Investment Counsel
ACIC American College of Investment Counsel
+1
Here is a detailed comparison based on the language provided:
Key Similarities
Structure: Both sets of securities were issued by special purpose entities (trusts or limited partnerships) funded by subordinated debt of Lehman Brothers Holdings Inc. (LBHI) or LBH plc.
Economic Exposure: An investment in ECAPS was essentially an indirect investment in the subordinated debt of LBHI or LBH plc, similar to how your Trust Preferreds represent beneficial ownership of LBHI subordinated debentures.
Trigger Events & Substitution: The ECAPS terms provided that if a "Trigger Event" occurred—defined to include the bankruptcy of LBHI—the securities would be substituted for preferred stock of LBHI.
Subordination: Both types of securities are deeply subordinated, typically sitting above common equity but below all senior and most subordinated debt in the capital structure.
United States Courts (.gov)
United States Courts (.gov)
+6
Subtle Differences in Structure
Issuing Entity: ECAPS were generally issued by Limited Partnerships ("LPs"), whereas the Trust Preferred Securities you hold were likely issued by Delaware business trusts (e.g., Lehman Brothers Holdings Capital Trust III, IV, etc.).
Collateral: The ECAPS sometimes included specific custody and collateral provisions, while standard trust preferred securities are simply backed by subordinated debentures.
ACIC American College of Investment Counsel
ACIC American College of Investment Counsel
+3
Outcome in Bankruptcy
While structurally similar, the legal battles surrounding the different Lehman instruments resulted in varying recoveries.
ECAPS: Following extensive litigation in both the US and UK courts, ECAPS holders were ultimately deemed to have claims that resulted in a payout, reversing earlier expectations that they were worthless.
Trust Preferreds: The Trust Preferreds you own, as claims against LBHI, were subject to the Third Amended Joint Chapter 11 Plan, often categorized as Subordinated Claims or Section 510(b) claims, which were largely deemed worthless or subject to negligible recovery compared to creditor claims.
One Essex Court
One Essex Court
+3
Disclaimer: The information above is based on the provided search results and represents a high-level comparison of the financial instruments mentioned. It does not constitute legal or financial advice.