Replies to post #2247 on Lehman Brothers Financial SA (LEHNQ)

[linda1]

I don't think so - there was an individual claim made by a Bank that held CTs that did not check the Guarantee box and filed a Proof of Claim based only on the Subordinate Notes held in the Trust.



So in other words - I have reviewed other individual claims and most of them did exactly like our Trustee did and did not bother to check the Guarantee box.



I think the confusion is that there is an Indenture for the Subordinate Notes held in the Trust and there is a Guarantee for the CT Preferred Securities and yet not for the Subordinate Notes.



The Capital Trust Preferred Securities rank junior to the Subordinate Notes held in the Trust and also all other liabilities of LBHI.



However - the Subordinate Notes held in the Trust rank junior to Senior Notes and yet equal with other General Unsecured Creditors.



And so from a certain creditor's point of view it was more advantageous to file a claim based on the Subordinate Notes held in the trust than the CT Preferred Securities.



In my view the Claims should be filed based on both the Subordinate Notes' Indenture and the CTs' Guarantee.

[linda1]

Here is an excerpt from a letter sent out to WMI Capital Trust holders by Wells Fargo - Indenture and Guarantee Trustee for the WMI Capital Trust - in which it says that under the Indenture and Guaranty the CTs are subordinate to Senior Creditors.




The Plan seeks to enforce the subordination provisions of the Indenture and Guaranty

and provides that Holders will not receive any distributions until all senior creditors are

paid in full. According to the Disclosure Statement, the Debtors estimate that Holders

will receive a 74% recovery based on the claim amount that was allowed in the

bankruptcy case on account of the PIERS Preferred Securities, which, as we reported in

a prior Notice, took into account the original issue discount with which the Securities

were issued.

[linda1]

Here is an excerpt from a letter sent out to WMI Capital Trust holders by Wells Fargo - Indenture and Guarantee Trustee for the WMI Capital Trust - in which it says that under the Indenture and Guaranty the CTs are subordinate to Senior Creditors.




The Plan seeks to enforce the subordination provisions of the Indenture and Guaranty

and provides that Holders will not receive any distributions until all senior creditors are

paid in full. According to the Disclosure Statement, the Debtors estimate that Holders

will receive a 74% recovery based on the claim amount that was allowed in the

bankruptcy case on account of the PIERS Preferred Securities, which, as we reported in

a prior Notice, took into account the original issue discount with which the Securities

were issued.