Lehman Brothers International (Europe) (in administration) - Update on Client Money and Client Assets held by Lehman Brothers Inc.

SIPA customer claims - Action required

On 19 September 2008 (the "Filing Date"), the United States District Court for the Southern District of New York entered an Order granting the application of the Securities Investor Protection Corporation for issuance of a Protective Decree adjudicating that the customers of Lehman Brothers Inc. ("LBI") are in need of the protection afforded by the Securities Investor Protection Act of 1970, as amended ("SIPA").  James W. Giddens (the "Trustee") was appointed trustee for the liquidation of the business of LBI, and Hughes Hubbard & Reed LLP was appointed as counsel to the Trustee.

On 1 December 2008, the Trustee informed customers of LBI who wish to be eligible for the maximum protection that may be afforded to them under SIPA that they must file claims with the Trustee by 30 January 2009. Claims filed in LBI's SIPA proceeding will be subject to the jurisdiction of the United States Bankruptcy Court for the Southern District of New York.

This statement is to notify you that, in addition to filing a claim on behalf of Lehman Brothers International (Europe)
(in administration) ("LBIE") by the 30 January 2009 deadline, the Joint Administrators, acting as LBIE's agent and without any personal liability (the "Administrators"), intend to submit an omnibus claim on behalf of each of LBIE's customers whose cash, securities or other assets were (or should have been) held by LBI on the Filing Date.  Note, however, the omnibus claim will not include cash, securities or other assets that were booked by customers directly with LBI, i.e. for a claimant that is a direct customer of both LBIE and LBI, LBIE's omnibus claim will only include cash, securities and other assets of such customer held by LBI through LBIE. The reasons that the Administrators are submitting claims on behalf of certain LBIE's customers as described above are to seek to preserve (i) each customer's right to obtain the maximum protection afforded under SIPA and (ii) the value of any security or other interest, if applicable, that LBIE may have over any proceeds of each customer's recovery from LBI's estate.  LBIE cannot make any representation regarding actual recoveries to be obtained from LBI's estate in respect of any of its claims.

LBIE is undertaking an extensive review of its books and records to identify customers with potential claims against LBI.  Notwithstanding LBIE's considerable efforts to retrieve and analyse as much customer data as possible, LBIE faces issues including missing or inaccessible records and IT data that complicate the compilation of claims.  Consequently, LBIE cannot guarantee that the omnibus claim that it files on behalf of certain of its customers will identify every customer with securities, cash or other assets held by LBI through LBIE and neither the Administrators nor LBIE accept any liability arising out of any inaccuracies or deficiencies in the information provided.  LBIE's customers may wish to pursue their rights in the SIPA proceeding by filing a claim on their own behalf with the Trustee as well.

Further, the Trustee has asked LBIE to provide customer signatures evidencing LBIE's authority to file claims on behalf of its customers.  LBIE has agreed to use reasonable efforts to obtain customer signatures without prejudice to any argument that LBIE is authorised to file claims on behalf of its customers on any other basis.  Additionally, the Trustee has indicated that receipt of responses to questions 4 - 11 on the SIPA claim form by LBIE's customers may help to expedite the Trustee's claim determination process.  LBIE has prepared a customer authorisation form (the "Customer Authorisation") to evidence LBIE's authority to file a claim on each customer's behalf and to permit each customer to respond to the questions the Trustee has posed to each claimant in the SIPA claims process. The Administrators urge LBIE's customers to sign and return Customer Authorisations, duly completing questions 1 - 8 thereof, to the Administrators at the address set forth below as soon as possible.  LBIE is advised that returning a signed Customer Authorisation to LBIE will not prejudice a customer's right to file a SIPA claim on its own behalf against LBI on or before 30 January 2009.

Copies of the Trustee's Notice of the SIPA claims process, claim forms, and other background information on the SIPA liquidation may be found at www.sipc.org under Proceedings/Liquidation and on the Trustee's website, www.lehmantrustee.com.

Click here to download a copy of the Customer Authorisation.

Executed Customer Authorisations should be be emailed in PDF to clientpositionresponses@lbia-eu.com or sent as soon as possible to:

Cathy Stewart
Trust Property Team
Lehman Brothers International (Europe)
25 Bank Street
London
E14 5LE

Any questions regarding this information should be directed to clientpositionresponses@lbia-eu.com