Lehman Brothers International (Europe) (in administration) and other UK affiliates announce a Joint Application to seek a determination on various issues concerning their shareholding and other relationships
The Joint Administrators of Lehman Brothers International (Europe) (“LBIE”) have now issued a joint application with the Joint Administrators of both Lehman Brothers Limited (“LBL”) and LB Holdings Intermediate 2 Limited (“LBHI2”). Lehman Brothers (Holdings) Inc (“LBHI”) is the sole respondent to the application.
The application will be heard later this year. It begins the process of seeking to identify, to the extent that LBIE’s funds for distribution are insufficient to settle the claims of ordinary unsecured creditors, what the obligations of LBL and LBHI2, as shareholders to LBIE, to contribute to the ensuing deficiency will be, the provision that should be made for the contingent claim of LBIE and the respective rights between the shareholders. It will also address the current status of claims filed by LBHI2 and LBL in the administration of LBIE.
In addition, and of critical importance to LBIE, will be ascertaining the relative ranking of interest accruing on the claims of ordinary creditors (in accordance with the provisions of rule 2.88 of the Insolvency Rules) and the subordinated debt claims of LBHI2, in the event that LBIE’s funds for distribution are sufficient to settle in full unsecured creditors’ claims. In this regard, the Joint Administrators of LBIE will argue on behalf of ordinary unsecured creditors that their claims to interest (contractual or statutory) should be paid in priority. LBHI2 and LBHI will be taking the contrary argument.
In filing this application the Joint Administrators of LBIE counsel creditors against assuming that LBIE will pay its ordinary creditors in full. Indeed, as noted above, the application is intended to answer questions that arise in the event that LBIE is unable to pay its ordinary creditors in full.
Should you have any queries regarding this update, please contact LBIE's Communications and Counterparty Management team at email@example.com. The Joint Administrators will continue to communicate with you through this website on all matters relating to the administration of LBIE.