Paulson is a party of the Group of Senior Bondholders that filed a Preliminary Objection to the Plan back in June or July in which the Objection suggested Substantive Consolidation.
NO - it does not mean some creditors will receive 100 % x 2 recovery.
There are Creditors of Subsidiaries and Affiliates that also have a Guarantee from LBHI - and this allowed the Creditors to file 2 Claims - one against the Subsidiary or Affiliate and one against LBHI.
However the Creditors cannot collect more than 100% on their Claim.
For example - Class 7 - Third-Party Guarantee Claims - Class 8 - Affiliate Guarantee Claims - of LBHI are the dual recoveries that Paulson is referring to.
These Classes 7 & 8 Creditors also have a Claim against the Subsidiary or Affiliate.
For example - LBI Senior Subordinated Noteholders also received a Guarantee from LBHI.
The LBI Senior Subordinated Noteholder can file dual Claims - one against LBI and LBHI.
What Paulson is saying is that these Creditors are collecting an additional 14.7% from LBHI and that isn't fair.
The only way that the additional Claims against LBHI can be eliminated is by Substantive Consolidation and I think that is the Plan that Paulson's group of Creditors will be filing.
I didn't read the news release and how it is worded it appears you are right - I have only read that a Creditor can only collect on what it is owed.
It may be an error on the writer's part - I will check the Preliminary Objection filed by Paulson's Group of Creditors to see if it actually says in the filing "a full double recovery".
Marsal’s plan “pits creditors of the various estates against each other,” the Paulson-Calpers group
said earlier this year in a court filing that termed the proposals unfair. The group said some Lehman
creditors would get paid twice, receiving “a full double recovery” by collecting from various Lehman
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