Replies to post #8815 on Lehman Brothers Financial SA (LEHNQ)

[littledevils90210]

OLD COLD DEBT is OLD COLD DEBT even if you buy it after BK. It is just changing ownership. They have to issue new debt to be call FRESH NEW DEBT :) LOL....go figure..devil

[marayatano]

Yes, but as we know after the chapter 11 filing an absolutely huge market was made for Lehman debt. How many old/cold creditors sold their debt (deeply discounted) to vultures looking to possibly profit from the BK? Those individuals who purchased the debt after BK would not qualify as old cold debt. To maximize NOLs, the reorganized company must be comprised of 51 percent old cold debt OR old cold equity.

I agree, many did sell post BK, however, there are other ways to retain NOLs other than the old & cold.

One important one is you can still retain NOLs without equity and CTs by merge/selling the company (at the very end of the liquidation/POR).

Yes, it is a change in ownership, but IRS allows 1 change of ownership every 2 years and still preserve tax attributes.

So in essence, higher tier creditors can still keep everything to themselves and cut all other junior creditors and equity out.

imo