Replies to post #2063 on Lehman Brothers Financial SA (LEHNQ)

[linda1]

"PREJUDICED BY THE CONSOLIDATION" is referring to creditors that will receive less of a recovery under substantive consolidation than under a Plan based on separate entities.


For example - Priority and Secured Claims are receiving 100% under the Present Plan based on separate entities. Since a Plan of Substantive Consolidation could reduce their recovery to 50% a Judge may deem that all Priority and Secured Claims be paid in full.


The Senior Notes are receiving a 17.4% recovery under the present Plan and WILL NOT BE PREJUDICED by Substantive Consolidation - if my calculations are correct and the recovery is in the 49.1% range.


Any recovery above 17.4 % for the Senior Notes under Substantive Consolidation would be deemed beneficial.


That is why a group of Senior Noteholders requested in their Preliminary Objection a new Disclosure Statement that includes what the recovery would be under Substantive Consolidation.


They know very well they would receive a higher recovery under Substantive Consolidation.