Joint Third Distribution, Third True-up Distribution and Catch-up Distribution - 16 March 2015

The Joint Administrators are pleased to announce that they have now reached agreement with the IRS and their withholding agents as to the treatment of distributions in excess of 100% of Best Claim value. The methodology agreed will follow on a pro rata basis the methodology applied to amounts distributed up to 100% of Best Claim value.

As a result of reaching this agreement,  LBIE is now in a position to make a further Common Terms Distribution which is a joint “Third Distribution”, “Third True-up Distribution” and a “Catch-Up Distribution” (each as explained below).

Although for ease of understanding they are described separately in this announcement, they will be conducted as a single Common Terms Distribution.

Capitalised terms used in this announcement but not otherwise defined shall have the meaning given to such terms in the Common Terms.

Third Distribution

LBIE expects that the Third Distribution will represent all the remaining value held in the pool of funds to be allocated to Consenting Beneficiaries, and so it is expected to be the final Common Terms Distribution.  This will be in addition to the 106% already paid by reference to Best Claims (on a Cumulative Gross Allocation basis).  LBIE will announce the final distribution % on or around the 29^th May, 2015 but it will be in the region of 4% subject to resolution of the final LBIE/LBI tax position

Third True-up Distribution

The funds released for the Third True-up Distribution will be distributed to those Consenting Beneficiaries who participated in any previous distributions and for whom Attributable Reserves were made in respect of potential U.S. federal income tax liabilities.  This will include reserves made with respect to the Second Interim Distribution and previous Catch-Up Distributions on amounts over 100% of Best Claim value. 

Catch-Up Distribution

Simultaneously, LBIE will make a Catch-Up Distribution for a small number of Consenting Beneficiaries who now satisfy the eligibility criteria for this Common Terms Distribution but who did not participate in one or more of the previous Common Terms Distributions (“Catch-up Beneficiaries”).

Catch-up Beneficiaries will be brought into the same position as if they had participated in all previous Common Terms Distributions (i.e., the sum total of all amounts paid or appropriated for them will be equivalent to 106% of their Best Claim).  Any Catch-up Beneficiary will also participate in the Third  Distribution to ensure the same percentage of their Best Claim is paid to them as is paid to all other Consenting Beneficiaries.

In relation to OSA Consenting Beneficiaries, the distribution may be subject to any or all Permitted Deductions.  These include a Tax Burden Liability, Costs Liability, OSA Distribution Liabilities and, for certain debtors only, Further Indebtedness Amounts.

In relation to CRA Omnibus Beneficiaries the distribution may be subjected to any or all Permitted Deductions as defined in the Common Terms.  These include a Tax Burden Liability, Distribution Liabilities (including Costs Amount and any Net Financial Liability) and, for certain debtors only, Further Indebtedness Amounts.

Further information will also be included in our next Progress Report which will be published around mid April.

No Shortfall Claims

LBIE hereby notifies all Consenting Beneficiaries that no 19/9 Shortfall Claims have arisen, and therefore no Shortfall Claim Determination Notices will be issued.

Key Dates

The relevant dates for the proposed Common Terms Distribution are as follows:

Notice of Intended Distribution                 16^th March 2015

Notice of Distribution                                 29^th May 2015

Proposed Distribution Date                      25^th June 2015