General Update – Conversion of LBIE Cash to GBP – 9 July 2013

In the ninth progress report to creditors dated 12 April 2013, the Joint Administrators explained that LBIE retained certain house estate bank balances in EUR and USD (the “Non-GBP Balances”) subject to the finalisation of potential rights of tracing for the client money estate (the “Tracing Rights”).

To the extent that they exist, Tracing Rights principally arose from balances held for Lehman Brothers Inc (“LBI”) and Lehman Brothers Finance SA (“LBF”) but which were not segregated in a client account at the point of LBIE’s insolvency. As part of broader settlements, both LBI and LBF recently assigned their client money claims to LBIE (via a special purpose entity, Laurifer Limited – “Laurifer”). In addition, numerous other client money claimants have assigned their client money to Laurifer to settle debts to LBIE or in exchange for unsecured claims. Accordingly, a large proportion of the client money estate will in due course become payable to Laurifer and it is anticipated that the proportion will continue to grow as overall agreement is reached with other counterparties. As a result of the above, and the value of non-GBP client money funds already available to satisfy client money claims retained by claimants, the Joint Administrators have concluded that LBIE should convert the Non-GBP Balances to GBP, and it has now done so.

The only amounts retained in the house estate in non-GBP currencies (with the exception at any time of any future operational requirements or receipts in the process of conversion to GBP) are the equivalent of £143m held as collateral for client asset claimant debtors.

Should you have any queries regarding this update please email generalqueries@lbia-eu.com.