Twelfth Announcement in respect of the settlement of the Omnibus Claim 09/01/2014

Introduction

Following our Eleventh communication dated 29 November 2013 and the issuance of a Notice of Intended Distribution on 2 December 2013 this Twelfth Announcement provides customers with an update on the eligibility and distribution amounts for the second distributions.

We do not plan to make any further announcements in relation to the second distribution but we will give a further update specifically dealing with the status of our discussions with the IRS in the first week of February.

Eligibility

The Cut-Off Date for eligibility has now passed. LBIE is pleased to announce that recent intensified engagement and communication with counterparties has resulted in 236 (87%) by number and $7,798m (97%) by Best Claim Value of the consenting population being eligible to participate at this time. Those counterparties currently eligible to participate in the second interim distribution otherwise referred to as Qualifying Consenting Beneficiaries as defined in clause 9.5 of the Common Terms have been notified on the client portal.

If LBIE has knowledge that beneficiaries cease or may cease to meet all of the relevant Eligibility Criteria as set out in clause 9.4.1 of the Common Terms during the period up until the second interim Distribution Date, they will become ineligible and will no longer be able to participate. In order to reduce the likelihood of becoming ineligible counterparties are encouraged to;

• Ensure the tax form declarations remain current and that there is no change in beneficial ownership; and
• Respond swiftly to any further requests for information and documentation.

Distribution

The Available Fund after adjustment for reserves is sufficient to provide a second interim distribution equal to 6% of the Best Claim amount of Qualifying Consenting Beneficiaries, before deductions for indebtedness, taxes and other matters.

As with the first distribution, because the determination of the character and source of the payment for US federal income tax purposes remains outstanding, there is no alternative but for our withholding agent to reserve 30% of the distribution amount paid, with only certain exceptions. (This includes instances where the payment is to be made to a Qualifying Consenting Beneficiary that has already provided a validly executed U.S. Form W-9 , Request for Taxpayer Identification Number and Certification, or to the extent a payment is otherwise attributable to a beneficial owner that has provided a validly executed Form W-9. For example, where the payment is made to an intermediary and the payment can ultimately be allocated and attributed to a beneficial owner that has provided a Form W-9)

LBIE would like to draw your attention to the following planned dates ahead of the second distribution (the following dates are based on or around a targeted 30 January distribution).

• The Notice of Distribution to Qualifying Consenting Beneficiaries will be communicated on 10 January 2014 or shortly thereafter.  This notice will include counterparty specific information on Gross Distribution, deductions and reserves.
• Beneficiaries’ ability to raise a Common Terms Dispute in respect of each disputed Notice of Distribution figure will cease five business days subsequent to the issuance of the Notice of Distribution.

Important Notice – US tax

To ensure compliance with Treasury Department Circular 230, customers are notified that: (a) any discussion of US federal tax issues in this announcement is not intended or written to be relied upon, and cannot be relied upon, for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code; (b) such discussion is included herein by LBIE in connection with the promotion or marketing (within the meaning of Circular 230) by LBIE of the transactions or matters addressed herein; and (c) you should seek advice based on your particular circumstances from an independent tax adviser.

Important Disclaimer

The information and contents of this update communication are being provided to you by LBIE for discussion purposes only. This update does not constitute a commitment or offer on the part of LBIE or its Joint Administrators, and should not be construed as such, nor does it constitute any form of advice to the recipients. The contents of this communication are based on analysis by LBIE, which has not been audited and LBIE reserves the right without specifying any reasons to amend all or part of this communication.

Any party (including any recipients) who obtains access to and chooses to rely on this update communication (or any part thereof) will do so entirely at its own risk. No person has, nor is held out as having, any authority to give any statement, warranty, proposal or undertaking on behalf of LBIE or its Joint Administrators in connection with this communication.

LBIE and its Joint Administrators will be under no obligation to provide the recipients with access to any additional information, to update this document or to correct any inaccuracies in it which may become apparent.

LBIE and its Joint Administrators, and their respective officers, employees and agents disclaim any liability which may arise from this communication, or any other written or oral information provided in connection herewith, and any errors and/or omissions herein or therein.

Nothing contained in this update communication is an acknowledgement of any claim that a recipient or any other claimant may have against LBIE or any other entity. Neither LBIE nor its Joint Administrators shall have any liability to any recipient or to any other person in respect of the information contained herein or for any defect or incompleteness in it. No representation is made by LBIE or its Joint Administrators about any claim that may be asserted against LBIE in respect of the LBI positions or any shortfall in recovery of the LBI positions.