General Update - Securities Investor Protection Corporation (‘SIPC’) LBIE House Customer Claim - 02/08/2011

This update concerns LBIE's SIPC House Customer Claim ("House Customer Claim") against Lehman Brothers, Inc. ("LBI"). LBI is a US broker dealer affiliate subject to SIPA Trustee stewardship. For further information on LBI and the SIPC process, please refer to the Joint Administrator’s six monthly Progress Reports. Alternatively, the SIPA Trustee (“Trustee”) maintains his own web address at www.lehmantrustee.com.

Since the Trustee's initial denial of the House Customer Claim in September 2010, LBIE has attempted to engage LBI in a cooperative effort to resolve its claim. Reflecting that, the Trustee agreed to a number of extensions to the deadline for LBIE to object to the Trustee’s determination.

The last extension period expired on 1 August 2011 and LBIE has filed its formal objection in respect of the Trustee’s determination that LBIE may not have a claim in the customer property fund. 

LBIE has taken the decision to bring the matter before the relevant court at the earliest opportunity having been recently informed by the Trustee that he intends to argue, among other things, that LBIE may not have a claim in the fund of customer property because it is an Affiliate within the Lehman Group. The issue of whether or not LBIE, as an Affiliate, may have a claim in the fund of customer property will be a defining issue for LBI given the size of the House Customer Claim.

A trial date for this matter will be set by the court and is unlikely to be before calendar year 2013.

Additionally, LBI has submitted a revised claim into LBIE and this is receiving appropriate consideration.

Finally, readers are referred to the Joint Administrators’ recent update in respect of the Omnibus Claim and are reminded this is quite separate from the House Customer Claim.

Should you have any queries regarding this update, please contact LBIE's Communications and Counterparty Management team at claimresolutionagreement@lbia-eu.com. As always, the Joint Administrators will continue to communicate with you through this website on all matters relating to the administration of LBIE.