Client Money Update - Update on Client Money held at Lehman Brothers Bankhaus AG - 23/06/2011

This update concerns the claim made by the Joint Administrators 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 Main Regional Court in Germany, claiming the return of US$1 billion plus interest to LBIE by Bankhaus.  This claim was dismissed by the Frankfurt Court on 7 October 2010.  The written judgment received on 11 October 2010 denied the existence of a trust relationship between LBIE and Bankhaus and failed to make a judgment on the substance of LBIE's pari passu claim for the client monies, prompting LBIE to appeal.

As stated in our update of 14 February 2011, the Joint Administrators filed an appeal notice at the German court on 10 November 2010.  Further written arguments were submitted on 11 January 2011 and 4 May 2011. 

On 18 May 2011, the Joint Administrators attended the Appeal Court hearing. Following this oral hearing the case was referred back to the Court of First Instance with the judgement dated 8 June 2011. 

The formal written judgment referred the proceedings back to the Regional Court of Frankfurt am Main but dismissed LBIE's request for further information regarding the whereabouts of the client money, taking the view that sufficient information had already been provided to LBIE.  The judgment makes a number of supportive comments regarding LBIE's case but emphasised that the issues needed to be considered in light of the relevant matters of fact.  The date for the next court hearing is unlikely to be before September 2011.

Further updates regarding the Joint Administrators' progress in this regard will follow in due course. A copy of an English translation of the judgment dated 8 June 2011 is available here.

As always, the Joint Administrators will continue to communicate with you through this website on all matters relating to LBIE's administration. Should you have any questions regarding this update, please contact the Communications and Counterparty Management team at clientpositionresponses@lbia-eu.com.