Replies to post #12908 on Lehman Brothers Financial SA (LEHNQ)

[marayatano]

I honestly do not see anything positive unless the liabilities comes way down from expungment/reduction/dismissed/etc.

or...

The assets recover substantially.

Lehman is just tooo far out of the money when you have holding creditors only recovering 18 cent on the dollar. Too much spread.

You have to remember, Lehman borrow $44 for every $1 dollar they had and then the market/economy tanked. It is almost like a margin call.

Coincidentally, there is a movie called "Margin Call" is it fit Lehman story very well.

For all I know, it was about Lehman with the names changed.

www.imdb.com/title/tt1615147/

Storyline

A respected financial company is downsizing and one of the victims is the risk management division head, who was working on a major analysis just when he was let go. His protégé completes the study late into the night and then frantically calls his colleagues in about the company's financial disaster he has discovered. What follows is a long night of panicked double checking and double dealing as the senior management prepare to do whatever it takes to mitigate the debacle to come even as the handful of conscientious comrades find themselves dragged along into the unethical abyss.

imo

[hestheman]

Maraytanyo is quite intelligent when it comes to the bankruptcy aspects and how bankruptcies work. I know that might not be a popular thing to say on this board but I give him his due. That being said, while most prosepectus guarantees for a subordinated debt of our distinction would be worthless in a bankruptcy....once again, our contract states our guarantee will not be discharged. A very good arguement could be made in court that "discharged" is a common bankruptcy term and that the prospectus implies that the guarantee will not be dismissed even in bankruptcy. Some on here will point out that the guarantee is only valuable to the extent that the holding company pays the trust. Well...Lehman is emerging with $30 plus billion and tens of billions of dollars on top of that most likely, in assets. They will have an obligation to pay the trust or it is in default (read stockjoker post). The terms of the prospectus will once again be in play. At the very least Lehman will have to distribute new shares to CT holders in a preferred stock issue of equal value. JMHO