4 February Creditor Update – Future “catch up” dividends to unsecured creditors and Small Claims Settlement Offer (SCSO) payments

Payment of the first “catch up” dividend and the re-run SCSO

The Joint Administrators confirm that:

1. First “catch up” dividend: for those creditors with admitted claims prior to 31 January 2013, payment of the first “catch up” dividend (at a dividend rate of 25.2%) will be made on or around 28 February 2013; and
2. February’s SCSO: for those creditors who accepted the SCSO prior to 31 January 2013, payment (equivalent to 90% of their agreed claim amount, capped at £135,000) will be made on or around 28 February 2013.

Future “catch up” dividends

It is the Joint Administrators’ intention to continue to pay “catch up” dividends on a regular basis to enable creditors to receive payment of previous interim dividends shortly after having had their claim agreed and admitted.

The Joint Administrators will in due course provide a provisional timetable for future “catch up” dividends for the remainder of 2013. However, the Administrators wish to advise creditors that the next two “catch up” dividends will be paid as follows:

Prior to each cut-off date, creditors wishing to participate in the following “catch up” payment must have met the following conditions:

• submit a valid Proof of Debt via the LBIE Client Information Portal;
• have their unsecured claim agreed and admitted via an executed claims determination deed (“CDD”) (or similar agreement); and
• provide their standard settlement instructions (“SSIs”) for a GBP bank account.

SCSO – re-issue

In recent weeks, the Administrators have made a significant number of offers to creditors where the amounts owed by LBIE are less than £150,000 (in particular to creditors who are only owed client money balances). Accordingly, and following the success of the previous two SCSOs, the Administrators have decided to re-issue the offer to creditors such that they can elect to receive a single payment in full and final settlement of their claims against LBIE.

The offer is available to any creditor who, having had their claim agreed and prior to receiving an interim or “catch up” dividend payment, elects to participate in the SCSO (“Eligible Creditor”).

Under the SCSO, the Joint Administrators are offering to make a full and final settlement to an Eligible Creditor whose claim does not exceed £150,000 (or who wishes to cap its claim at this level), via a single payment of 90% of their agreed claim amount (i.e. up to a maximum payment of £135,000).

The SCSO will follow the same cut-off and payment dates as set out above in “Future “catch up” dividends”. Consequently, prior to each cut-off date, to qualify for payment in the following payment run, Eligible Creditors will be required to:

• submit a valid Proof of Debt via the LBIE Client Information Portal;
• have their unsecured claim agreed and admitted via an executed claims determination deed (“CDD”) (or similar agreement);
• enter into an additional agreement with LBIE accepting the SCSO as full and final settlement of their claim; and
• provide their standard settlement instructions (“SSIs”) for a GBP bank account.

In the event that an Eligible Creditor elects not to participate in the SCSO, it will participate in the “catch up” dividend, as well as any dividends thereafter, in respect of its admitted claim.

Please note that, at this stage, the Administrators do not intend to extend the SCSO beyond the 22 March 2013 cut-off date.

Other matters

Creditors should note that:

• to be eligible to receive interim dividends, unsecured creditors with admitted claims must (to the extent they have not already done so) provide their GBP SSIs via LBIE’s Client Information Portal; and
• although the Bar Date has now passed, 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.

Should you have further questions regarding the Small Claims Settlement Offer please email smallclaimsoffer@lbia-eu.com. For all other 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.