Client Money Update - High Court Application Regarding Post Administration Money - 02/10/09 as updated 05/10/09

This update concerns the two-day hearing in the High Court, scheduled for the week commencing 5 October 2009, to determine the treatment of certain money received by LBIE after the time it entered administration ("Post-Administration Money"). Further background to the Application is set out in our updates of 17 July 2009 and 12 August 2009.

On 28 September 2009, the Joint Administrators served on the Respondents to this Application a further witness statement of Andrew Peter Clark in support of this Application.  A copy of this witness statement can be found here. The details of the Respondents are set out in our update of 18 September 2009.

The Joint Administrators have prepared a list of Frequently Asked Questions regarding this application, which can be found in our update of 17 July 2009, and are supplemented below:  

Q. Are the Administrators asking the court to determine the treatment of Post Administration Money received under the Margin Lending Agreement ("MLA")?

A: No. The Application relates to cash received by LBIE post-administration in respect of corporate events or actions which took place in respect of securities held by LBIE, at the time of the corporate event or action, as custodian under certain versions of the Charge IPBA. The Application does not seek a determination of the status of cash received by LBIE under the MLA.

Q: Will the Administrators make an application for directions in respect of cash received under the MLA?

A: It is too early to say. When the Judge gives judgment on the Application the Administrators will consider the implications (if any) of the Judge's reasoning on the rights of LBIE's clients under other agreements, including the MLA.

The two-day hearing in the High Court scheduled for the week commencing 5 October, has been confirmed and is scheduled to start on the 6th of October 2009. Please continue to check the website for information on this and other matters relating to the administration of LBIE.  As always, please direct any questions you may have with respect to the above to clientpositionresponses@lbia-eu.com.