Replies to post #30856 on Lehman Brothers Financial SA (LEHNQ)

[hestheman]

Kudos to you for reading up and doing DD. Yes, I have read all about bankruptcy 363 sales (probably more than I would have ever wanted to in my lifetime, LOL). Many posters on here will tell you I have made many posts concerning the bankruptcy 363 sale of assets...which is what Lehman is undergoing. In the past (in a nonbankruptcy setting) if a bank wanted to raise capital by perhaps selling some assets or maybe even undergoing a merger, they needed approval from two groups....their secured creditors and trust preferred shareholders. Notice, they did not need approval from any of their other unsecured creditors, if that gives you any clue as to the power and iron clad guarantees held by some trust preferred securities. In one such case, a bank holding company wanted to sell the main part of its business, which accounted for substantially all of the holding company assets. They tried to do this under the guise of the 363 bankruptcy asset sale. The trust preferred shareholders objected and the Judge rejected the sale based upon the trust preferred holders guarantees partaining to the sale of all, or substantially all of the holding companies assets. THIS IS THE REASON I am almost positive a deal has been made in bankruptcy to assume the CTs, or assign them to our successor or a third entity. Substantially all of our assets were sold to Barclays (Lehman's successor)....CTs have the same provison regarding the sale of substantially all of the holding company's assets PLUS successor obligor guarantees. When the POR closes out....two groups will be wholly recovered, the secured creditors (paid 100% on the dollar) and cap trust preferred holders. I'd bet a bottle of Corona on it.....Hestheman outty

[hestheman]

P.S. one more quick note on this. A holding company can indeed bypass the approval of trust preferred shareholders using the 363 asset sale....but ONLY if they are selling a select, minor portion of assets. If they are selling all or substantially all, trust preferred shareholders must be accounted for through assumption by the debtor or by the successor through assignment. I do not believe Judge Peck screwed us over....but if he did this situation would definitely need to be appealed to a higher court IMHO.