Client Assets Update - Publication of Circular and Claim Resolution Agreement - 24 November 2009

This update relates to the strategy for return of client assets proposed by Lehman Brothers International (Europe) (in administration) ("LBIE") to deal with the return of trust assets held by LBIE. Further background information in relation to the strategy is set out in our update of 5 October 2009.

The Offer

LBIE is currently making an offer ("Offer") to certain of its clients and counterparties to enter into a Claim Resolution Agreement (the "Agreement").

The Agreement allows LBIE and those eligible parties that agree to be bound by the Agreement to compromise and agree claims relating to trust assets and financial contracts. While the principal focus of the Agreement is to facilitate the return of trust assets to those parties with ownership claims, the Agreement also contains mechanisms to determine the claims of those parties with purely unsecured financial claims.

Further details on whether you are eligible to accept the Offer can be found in the Circular (as described below).  You should read the Circular carefully in full.

LBIE has today sent a letter by email to each person that LBIE has determined, based on its books and records, may have an ownership claim to trust assets. These persons are referred to as "TA Offerees" in the Agreement. The letter also contains access links to the Circular and the Form of Acceptance.  If you have not received a letter via email and believe you may have an ownership claim to trust assets, please contact the generalqueries@lbia-eu.com mailbox referencing your full client name and GAC code.

Parties who have entered into financial contracts with LBIE and may have purely unsecured financial claims against LBIE may also be considered eligible offerees (referred to as "NTA Offerees" in the Agreement) and can access a copy of the Circular and the Form of Acceptance though the links below.  Please note NTA Offerees are subject to different timetable terms and conditions under the Offer as referenced below.  Please make sure these are read in full.

Circular - Agreement and explanatory materials

The published circular (the "Circular") contains the full text of the Agreement as well as explanatory materials. You can access a copy of the Circular here.

The Circular is made up of the following sections:

Part I - Letter from the Administrators (including Background History and a Reader's Guide to the Agreement)

Part II - Summary of the Principal Provisions and Effect of the Agreement

Part III - The Agreement. The schedules to the Agreement in Part III include the terms and conditions of the Offer.

How to accept the Offer

The Offer is open for acceptance until 5.00pm (London time) on Tuesday 29 December 2009. If you are an eligible person and you wish to accept the offer, you must complete, sign and submit a Form of Acceptance to the Company by this date.

Full details of action required to submit your Form of Acceptance if you wish to accept the Offer are set out in Schedule 1 to the Agreement at Part III of the Circular and in the Form of Acceptance.  Detailed instructions on how to complete the Form of Acceptance are set out in the notes on page 4 of the Form of Acceptance.

Please submit your Form of Acceptance  to the Company by sending a scanned copy by email to generalqueries@lbia-eu.com, or by faxing a copy to +44 (0)20 7067 8542 as soon as possible and in any event so as to be received by the Company no later than 5:00 p.m. (London time) on Tuesday 29 December 2009. 

After you have submitted your Form of Acceptance by email or fax, you must send the original by pre-paid post or air mail to the Company as soon as possible to: Lehman Brothers International (Europe) (in administration), Trust Property, 24th Floor, PO Box 62492, London, E14 1JX, United Kingdom or, if you are sending by courier only, to: Lehman Brothers International (Europe) (in administration), Trust Property, 24th Floor, 25 Bank Street, London, E14 5LE, United Kingdom (marked for the attention of E. Levy).

What happens next

The Company will acknowledge receipt of your Form of Acceptance as soon as practicable after it receives your Form of Acceptance by email or fax. The Company will also notify you in writing in due course whether the Agreement has become effective and if so, the Company will confirm whether you are a party to the Agreement or not.  Such notification and further updates regarding the Agreement is expected at the beginning of January 2010.  Please note that NTA Offerees are subject to additional terms and conditions under the Offer and it is advised that the Terms and Conditions of the Offer, with specific attention to Paragraph 9, set out in Schedule 1 to the Agreement, along with the other documents in the Circular, are read in full.

The Joint Administrators are of the opinion that the Agreement represents the most efficient method of returning trust assets to clients of LBIE. As mentioned above, the closing date for receipt of Forms of Acceptance is Tuesday 29 December 2009. In order for the Agreement to become effective, it is essential that the required majority of acceptances are received by LBIE by that date.

The Joint Administrators will continue to communicate with you through this website regarding the Agreement. Please continue to check this website for information on this and other matters relating to the administration of LBIE.