Creditor Update – fourth interim distribution to unsecured creditors – 28 February 2014

The Administrators are pleased to announce to creditors the timing and quantum of the fourth interim distribution to unsecured creditors.

In summary, we explain in this update that:

1. the fourth interim distribution to unsecured creditors will be paid on or around 30 April 2014;
2. the last date for agreement of claims for inclusion in the fourth interim distribution will be 28 March 2014;
3. the dividend rate will be 7.8 pence in the pound taking the total cumulative dividend rate declared and paid to 100 pence; and
4. no further distributions beyond a rate of 100 pence will be possible until such time as matters concerning claims to the surplus beyond 100 pence are resolved, including those relating to the Waterfall Application.

Fourth interim distribution to unsecured creditors

The ability of the Administrators to announce a further distribution arises from the progress achieved since our last progress report for the period ended 14 September 2013. Further details will be provided in the Administrators’ eleventh progress report to be published in mid April 2014, but we are pleased to announce that we are able to pay a fourth interim dividend of 7.8 pence by the end of April 2014, which allows us to reach the milestone of a 100 pence cumulative dividend.

Unsecured creditors should be aware that, to allow sufficient time for inclusion in this dividend payment, creditors will need to have their claims agreed and admitted by 28 March 2014, if they have not already done so.

Pursuant to Rule 2.95 of the Insolvency Rules 1986, all creditors known to the Administrators are being sent by post today a notice of intention to declare a dividend. This highlights that:

• the last date for proving of debts will be 28 March 2014; and
• a fourth interim dividend will be payable no later than 28 May 2014, albeit the current intention is to make payment on or around 30 April 2014.

A copy of that notice can be accessed here

Pursuant to Rule 2.98 of the Insolvency Rules 1986, all creditors that have submitted a Proof of Debt (excluding rejected and withdrawn claims) will receive a written notification from the Administrators either prior to or at the time of the fourth interim dividend setting out further information, including: (i) formal confirmation of the 7.8 pence dividend rate; (ii) the total amount of the dividend being distributed; and (iii) the level of reserves for unsettled claims.

We continue to review taxation matters, principally US withholding tax, and this may reduce or delay the interim dividends paid to certain creditors. Due warning will be made on a case by case basis where possible.

The Administrators do not anticipate that any further distributions can be made until creditors’ rights to the surplus beyond 100 pence are resolved.  This includes issues relating to the Waterfall Application and, as set out in our last progress report dated 14 September 2013, this is likely to require compromise among creditors and/or further litigation to achieve this.  The Administrators will announce more on this subject as and when they consider it appropriate to do so.

Other matters

Creditors should note that:

• to be eligible to receive the fourth interim dividend, at the start of April 2014 every unsecured creditor with an admitted claim must confirm its GBP Standard Settlement Instructions (“SSIs”) and that it still owns the claim via LBIE’s Client Information Portal; and
• any unsecured creditor who has yet to submit a Proof of Debt via the LBIE Client Information Portal is encouraged to do so as soon as practicably possible.

For all queries relating to the content of this update, please contact your existing LBIE contact or the Communications and Counterparty Management team at unsecuredcreditors@lbia-eu.com.