Client Money Update - Update on Client Money held at Lehman Brothers Bankhaus AG - 07/10/2010

This update concerns the claim on behalf of LBIE clients for the return of US$1 billion of client monies deposited with Lehman Brothers Bankhaus AG ("Bankhaus") prior to the date of Administration.

On 22 December 2009, the Joint Administrators filed a petition at the Frankfurt am Main Regional Court, Germany claiming the US$1 billion plus interest be returned to LBIE by Bankhaus.

As stated in our update of 22 July 2010, the second oral hearing was held at the Frankfurt Courthouse at 10am on 7 October 2010.  At this hearing the Frankfurt Court handed down its judgement dismissing the petition made by the Joint Administrators. 

As a result of this dismissal, the Bankhaus Administrator’s decision to reject the Joint Administrators’ claims on behalf of LBIE clients for the US$1 billion of client money stands. For more information please review our update of 23 October 2009.

The Joint Administrators are disappointed with the Court’s decision and expect to make an appeal upon receipt of the written grounds for the judgement. Without a successful appeal there is a low likelihood of any financial recovery.

For further information on the potential impact of the insolvency of Bankhaus on LBIE’s client money, please see the FAQs for Trust Property.

Further updates on the progress of the claim will be communicated in due course.

Please direct any questions you may have with respect to the above to clientpositionresponses@lbia-eu.com.