Replies to post #116253 on Lehman Brothers Financial SA (LEHNQ)

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If Lbhi close its bankruptcy tomorrow, what options would be available, in spite debt classes 10 and 11 not being satisfied in full and equity class 12? And could class 12 receive a distribution if classes 10 and 11 are satisfied in full under a new post bankruptcy structure? Does satisfied in full require cash distribution? +11 If Lehman Brothers Holdings Inc. (LBHI) were to close its bankruptcy immediately—specifically, if Class 10 (Subordinated Debt) and Class 11 (General Subordinated Debt) are not satisfied in full, and Class 12 (Equity) exists—the options available are limited due to the strict priority rules of the US Bankruptcy Code.Key Takeaways as of May 2026:LBHI's case is still active: As of early 2026, the LBHI Chapter 11 case remains open as the sole survivor of the original twenty-three debtors.Classes 10/11 not paid: If Classes 10 and 11 are not satisfied in full, Class 12 (Equity) and all other lower-priority classes will be wiped out under the Absolute Priority Rule.Can Class 12 receive a distribution? Yes, but only if all senior classes (1–11) are paid in full, including post-petition interest.Satisfied in full: This generally means the principal amount plus post-petition interest, typically paid in cash, though a plan can structure alternative payments if accepted by the class.1. Options if Class 10 and 11 are NOT Satisfied in FullIf the bankruptcy closes tomorrow and Classes 10/11 are unpaid, the following occurs under the Modified Third Amended Joint Chapter 11 Plan:Equity/Class 12 Wipeout: Under the absolute priority rule, junior classes cannot receive anything if senior classes are not paid in full.Winding Down/Liquidation: The Plan Administrator (likely LAMCO) would continue to liquidate remaining illiquid assets to satisfy the remaining debt of higher classes.Final Distribution Opt-In: Creditors may be offered a final distribution, allowing them to close their involvement early, but this usually implies a voluntary reduction in total potential claims (not a "full" satisfaction).Transfer of Claims/Escrow: If the case closes with still-unpaid creditors, beneficial interests in the Plan Trust (escrow) might be cancelled if the closure does not harm the estates.2. Can Class 12 Receive a Distribution if Classes 10/11 Are Satisfied in Full?Yes. If a new post-bankruptcy structure or continued liquidation results in classes 1–11 being satisfied in full (including accrued interest), Class 12 (Equity) would receive any remaining assets.The "Full Payment" Trigger: The Plan specifically states: "Classes 1 through 11 have been satisfied in full... each holder of an Equity Interest in LBHI may receive its share of any remaining assets of LBHI".Low Probability: As of 2017/2021, it was not anticipated that equity would receive a distribution.3. Does "Satisfied in Full" Require Cash Distribution?While the Lehman plan has focused on cash, "satisfied in full" does not necessarily mean cash on a specific day; it can be a combination of:Cash: The primary method for most distributions.Value of Collateral: If the debt is secured, the property value counts.Post-Petition Interest: To be "satisfied in full," senior creditors often must receive interest that accrued after the bankruptcy filing.Alternative Value: The plan can provide non-cash distributions, but it is rare if the goal is to pay creditors in full.Disclaimer: This information is based on public records, case documents up to early 2026, and the confirmed bankruptcy plan. Specific legal interpretations require legal counsel.