Creditor Updates

In accordance with Paragraph 47(1) Schedule B1 of the Insolvency Act 1986, the directors of an insolvent company are bound to submit a Statement of Affairs to the insolvency office holders. The Statement of Affairs is a statutory document setting out the financial position of the company at the date of insolvency.

On 8 July 2009, the Statement of Affairs of Lehman Brothers International (Europe) (in administration) ("LBIE") was submitted to the Joint Administrators. The Statement of Affairs was produced by Mr Dominic Gibb, former financial controller and director of LBIE.

In advance of the finalisation of the Statement of Affairs, the Joint Administrators obtained from the Court an order for limited disclosure in respect of certain parts of the statement. The Joint Administrators were concerned that it would be prejudicial to the conduct of the administration for the names of individual creditors and details of LBIE's estimated liabilities to individual creditors to be disclosed.

In particular, the Joint Administrators were concerned that (i) disclosure of this information could result in LBIE breaching duties of confidentiality owed to certain of its creditors; (ii) valuing the claims with any degree of certainty was extremely problematical and thus disclosing names of creditors and valuations of claims could be materially misleading and could result in claims submitted against the estate increasing, referencing values in the statement of affairs; and (iii) the level of sensitivity around this information would mean that its disclosure could have a detrimental impact on what was and is currently a cooperative and mutually beneficial relationship with LBIE's counterparties. A copy of the court order obtained by the Joint Administrators can be accessed by clicking here.

Further details of the basis for the Joint Administrators' decision to obtain this order can be found in the witness statement of Steven Pearson filed in support of the application for limited disclosure, which can be accessed by clicking here.

As a result of this Court Order, the Statement of Affairs is publically available only in its limited form. The redacted Statement of Affairs for LBIE can be accessed by clicking here.

Guarantee and Assignment Documents

The Joint Administrators of Lehman Brothers International (Europe) (in administration) ("LBIE") previously advised creditors of a motion filed by Weil, Gotshal & Manges LLP with the US Bankruptcy Court requesting that an order be made for a bar date of 24 August 2009 to be set for filing proofs of claim against LBHI (including those claims based on guarantees and other promises made by LBHI), as well as a number of other US Lehman Brothers entities in chapter 11.

A hearing in relation to the bar date application was due to take place on 17 June 2009, but was postponed following numerous objections being filed in the Bankruptcy Court by creditors.  The hearing will now take place on Wednesday 24 June 2009.

Set out below are copies of three documents which have come to the attention of the Joint Administrators and which may be of interest to creditors in the context of the forthcoming bar date applicable in LBHI's bankruptcy proceedings.  A copy of LBHI's Board resolution dated 9 June 2005 setting forth its guarantee of the obligations of various subsidiaries has been posted on this website previously.  Creditors of LBIE and other persons may have claims against LBHI pursuant to these documents.  Each creditor should make its own assessment of the relevance of these documents to it and take its own legal advice.  Neither LBIE nor the Joint Administrators make any representation, express or implied, to any creditor or to any other person as to the effect of these documents.

• LBHI Board Resolution dated 21 August 2000 and guarantee of obligations of Lehman Brothers (Luxembourg)
• LBHI Board Resolution dated 9 June 2005 setting forth its guarantee of the obligations of various subsidiaries
• Note from LBHI to Standard and Poor's Rating Service dated 4 January 2008 regarding its guarantee of LBIE's obligations

Motion for a bar date of 24 August 2009 for claims to be filed against Lehman Brothers Holdings Inc ("LBHI") and certain other US Lehman Brothers entities in chapter 11

The Joint Administrators of Lehman Brothers International (Europe) (in administration) ("LBIE") understand that a motion has been filed by Weil, Gotshal & Manges LLP with the US Bankruptcy Court requesting that an order be made (the "Bar Date Order") for a bar date of 24 August 2009 to be set for filing proofs of claim against LBHI (including those claims based on guarantees and other promises made by LBHI), as well as a number of other US Lehman Brothers entities in chapter 11.  If granted, we understand that the proposed Bar Date Order would require any claimant (with some limited exceptions) wishing to submit a claim against the estate of LBHI (and/or the other entities) to do so by 5pm Eastern Time ("ET") on 24 August 2009 (the "Bar Date").  Claimants who fail to submit their claim prior to the Bar Date will be barred from ever submitting a claim and LBHI (and the other entities, as relevant) will be forever discharged from such a claim.

As you may be aware, LBHI issued various forms of guarantees relating to, among others, contracts and financing transactions, derivative contracts and other payment performance guarantees. Creditors who wish to obtain access details to the LBIE client information and claims website should follow the email link at //business-recovery/administrations/lehman/index.jhtml

Any potential creditor of LBIE with such a guarantee from LBHI may be able to submit a claim against the estates of both LBIE and LBHI.

We understand that certain claimants who have already submitted a claim may, under the proposed Bar Date Order, be required to resubmit their claim in order to bring it into line with the procedural requirements set out under the Bar Date Order.

The requirements under the Bar Date Order include that claims be filed in the prescribed form in writing and that certain information be uploaded on-line at http://www.lehman-claims.com. Certain claimants will also be required to complete a "Guarantee Questionnaire" and/or a "Derivative Questionnaire", as relevant.  

Objections to the motion can be made by any relevant party, but must, according to the motion, be filed upon the following parties by no later than 12pm (ET) on 12 June 2009:

(i) The Chambers of the Honourable James M. Peck, One Bowling Green, New York, New York 10004, Courtroom 601, USA;
(ii) Weil, Gotshal & Manges LLP, 767 Fifth Avenue, New York, New York, 10153, USA  Attn: Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq.;
(iii) The Office of the United States Trustee for the Southern District of New York, 33 Whitehall Street, 21st Floor, New York, New York, 10004, USA  Attn: Andy Velez-Rivera, Esq., Paul Schwartzberg, Esq., Brian Masumoto, Esq., Linda Riffkin, Esq., and Tracy Hope Davis, Esq.; and
(iv) Milbank, Tweed, Hadley & McCloy LLP, 1 Chase Manhattan Plaza, New York, New York, 10005, USA  Attn: Dennis F. Dunne, Esq., Dennis O'Donnell, Esq., and Evan Fleck, Esq.

We understand that the objection should include the name of the objecting party, the basis for the objection and the specific grounds for the objection.

The Joint Administrators cannot advise creditors on the filing of claims against LBHI (or the other entities referenced in the Bar Date Order) or as to whether they should object to the motion put forward by Weil, Gotshal & Manges LLP.

For further information regarding the Bar Date Order, creditors should visit http://www.lehmanbrothersestate.com

The Joint Administrators act as agents for and on behalf of LBIE and neither they, their firm, employees or representatives shall incur any personal liability under or in relation to this communication. 

The Joint Administratorsare providing this communication for information purposes only and its contents are not intended to constitute legal or other advice and are being provided on a non-reliance basis.  The Joint Administrators make no representation or warranty, express or implied, as to, or assume any responsibility for, the accuracy, reliability or completeness of the information contained in this communication nor shall they be otherwise liable to any person in respect of such information.  In all cases, creditors should conduct their own review of the motion, the Bar Date Order and any related materials and seek independent legal advice or other professional advice, where relevant.

Unless otherwise stated neither LBIE or the Joint Administrators are responsible for any of the websites listed in this communication.

• Letter to counterparties with long confirmation
  - 13/10/2008

• Letter to counterparties with master agreements
  - 10/10/2008

• Letter to all known creditors enclosing Notice of Appointment - 10/10/2008

• Letter to counterparties enclosing Notice of Appointment - 10/10/2008

On 4 December 2009, the Joint Administrators issued a Notice of Proposed Distribution requesting that unsecured and preferential creditors lodge proofs of debt by 31 December 2010 in order to qualify for a dividend which would be paid by no later than two months later.

As explained in the Joint Administrators' fourth progress report dated 14 October 2010 (the "Progress Report"), owing to the impact of the Court of Appeal's recent judgment with respect to Client Money, the Joint Administrators cannot now make this dividend payment as intended. Consequently, the Joint Administrators will shortly apply to the High Court to extend the date by which proofs must be lodged, and the proposed dividend payment date, by two years.

This is a "long stop" date to avoid, as far as possible, the need for subsequent Court extensions.   However, the Joint Administrators hope to shorten this timetable and will seek to agree claims in the interim period following the Consensual Approach as set out in the Progress Report.  In addition, if and when sufficient clarity on the impact of the Client Money judgment can be obtained, the Joint Administrators will seek to bring forward the timetable for payment of a dividend, and the date to lodge proofs of debt.

Accordingly, the Joint Administrators request that creditors continue to submit proofs of debt as soon as is possible (if they have not already done so), in order that their claims can be agreed in a timely manner and, if and when the timetable is accelerated, they qualify for dividend payments.

When the Joint Administrators are made aware of the Court's decision as to whether it will accede to this application, a notice confirming the revisions to the deadlines and timetable will be posted on the PwC LBIE website and an email will be sent to counterparties alerting them of such posting.

Until such time as the Court's decision is made, and it is confirmed otherwise, the date for lodging proofs of unsecured and preferential claims remains 31 December 2010.

Should you have any further questions, please do not hesitate to contact the Communications and Client Management team on unsecuredcreditors@lbia-eu.com.

On 16 June 2010, the Joint Administrators announced that they would be testing the feasibility of the Consensual Approach to the resolution of LBIE’s unsecured creditor claims. The Consensual Approach was conceptually outlined on the PwC-LBIA website at the timeand can be viewed here.

LBIE also informed claimants that if they wished to be considered for the Consensual Approach, they would need to submit a proof of debt.  The expectation at the time was that, if the Consensual Approach was formally launched later this year, a creditor would need to submit a proof of debt before 17 September 2010 to be considered for participation.

LBIE has since made significant progress in engaging with creditors and the Joint Administrators have been greatly encouraged by the extent of positive interest in the Consensual Approach.

Over the last few weeks, LBIE has both solicited and received feedback from counterparties regarding the proposed Consensual Approach.  A consistent request from many counterparties has been to extend the deadline of 17 September 2010, in particular given the complexity of many creditors’ positions.  Accordingly, the Joint Administrators have agreed, in conjunction with the Unsecured Creditors’ Resolution Working Group (“UCRWG”), a working group which includes members of the creditors’ committee, that the 17 September 2010 deadline for proof submission will be extended.

The Joint Administrators continue to develop the Consensual Approach.  In consultation with the UCRWG, they are currently considering an appropriate date to set as a revised deadline.  The Joint Administrators are also reviewing feedback from counterparties to assess whether any other refinements may be desirable in order to proceed.

The Joint Administrators will communicate further developments regarding the Consensual Approach in their 4^th Progress Report, including an update on the period of extension that will be allowed for submission of proofs, unless that has been separately communicated in the intervening period. The 4^th Progress Report is due to be published on 14 October 2010. In the meantime, LBIE’s counterparties should continue to finalise their submission of proofs of debt as soon as possible, as these will be required in order to comply with the revised timetable, when announced.

Should you have any questions regarding this update, please contact the Counterparty Communications and Management team at unsecuredcreditors@lbia-eu.com.

The purpose of this update is to share the Joint Administrators' current thoughts in relation to the creation of an expedient process to facilitate both the determination of unsecured creditors' claims and the payment of an interim distribution.

Background

In December 2009, the Joint Administrators obtained an order from the High Court of England and Wales granting them permission to make a distribution to unsecured creditors. The effect of this was to convert the administration of LBIE into a distributing administration akin to a liquidation. The Joint Administrators have since that time been engaged in the process of determining the validity of unsecured creditors' claims. This has involved the implementation of comprehensive processes for the reconciliation and valuation of claims.

According to LBIE's records there are up to 6,300 counterparties who could have unsecured claims against LBIE.  The overwhelming majority of these claims arise from a wide variety of complex financial trading arrangements. It is apparent from the work undertaken to date that the manner in which many unsecured creditors have calculated and submitted claims varies widely and that, in many instances, claims asserted by unsecured creditors are higher than LBIE's assessment. Drawing upon their experience in other major insolvencies and following a careful evaluation of the claims profile in this estate, the Joint Administrators have concluded that a conventional procedure for determining claims, whether using their existing powers under a distributing administration alone or in conjunction with a scheme of arrangement or a company voluntary arrangement, will involve a time consuming and expensive adjudication process that is likely to involve extensive disputes and potential litigation. This in turn means that it is likely to be many years before a material interim dividend can be paid to unsecured creditors.

A Consensual Approach

In the Joint Administrators' 3rd Progress Report dated 14 April 2010, the Joint Administrators identified that they were exploring various options to progress the determination of unsecured creditors' claims.  The Joint Administrators have subsequently, in conjunction with the Unsecured Creditors' Resolution Working Group (the "UCRWG"), a working group which includes members of the creditors' committee, agreed to explore the feasibility of an alternative, consensual procedure (the "Consensual Approach") for determining claims, as the Joint Administrators believe that this could materially accelerate the resolution of the LBIE estate. 

The exact scope of the Consensual Approach is still being explored. At present, it is anticipated that the focus of the Consensual Approach will be upon the financial trading creditors ("FTCs").

• Under the Consensual Approach, LBIE will offer to agree each participating FTC's claim by substituting the FTC's claim value with a value determined by LBIE using its own methodology (the "LBIE Determination").
• The LBIE Determination will be established using a comprehensive set of processes, data sources and valuation models, all subject to comprehensive review and universally applied to the unsecured creditors falling within the scope of the Consensual Approach.
• The offer by LBIE will be conditional upon the acceptance of the LBIE Determination by an overwhelming majority of the FTCs.  The Joint Administrators will continue to work with the UCRWG to define the pre-requisite threshold level of support required to implement this Consensual Approach.
• If the required level of acceptance is met, the claims of participating FTCs will be admitted for dividend in the administration of LBIE at the LBIE Determination.
• The Joint Administrators are also exploring whether it might be possible to provide participating FTCs and other unsecured creditors with admitted claims with an option of receiving a one-off cash payment in full and final settlement of their claim.

Next Steps

The Joint Administrators are committed to implementing a procedure for the determination of the claims of FTCs that is both pragmatic and broadly acceptable to the market. The feasibility of the Consensual Approach is entirely dependent on the willingness of an overwhelming majority to support the process. The Joint Administrators will therefore be engaging with a number of FTCs with regard to their claims and seeking their support for the Consensual Approach.

FTCs who are contacted are encouraged to engage in a constructive dialogue with the Joint Administrators as a matter of priority, as the Joint Administrators wish to provide feedback to the UCRWG over the coming weeks.

In the event that the engagement with FTCs leads the Joint Administrators and the UCRWG to conclude that the Consensual Approach could be viable, it is anticipated that meetings will be hosted in London and New York to outline the Consensual Approach in more detail. The Joint Administrators would envisage launching the Consensual Approach and issuing LBIE Determination notices prior to the end of the current year, and would aspire to make a first cash distribution to unsecured creditors as early as possible in 2011.

If you have an unsecured claim against LBIE and have not yet provided the Joint Administrators with details, it is imperative that you do so, failing which your claim may not be admitted and FTCs may not be invited to participate in the Consensual Approach. For more information on submitting a claim please click here.

Conclusion

The Joint Administrators are confident that if the Consensual Approach is implemented there will be very considerable benefits to unsecured creditors.  These include:

• The rapid determination of an agreed and formally admitted claim against LBIE
• A significant reduction in the administrative burden for unsecured creditors
• A material reduction in the costs of determining unsecured creditors' claims
• An acceleration to the timing of a cash dividend from LBIE
• The potential option of receiving a full and final payment in settlement of an admitted claim
• The potential for enhanced overall realisations in the LBIE estate as resources are focused on asset realisation

The Joint Administrators recognise that creditors may have questions regarding this update and the Consensual Approach. If you do have any questions, please contact us by emailing unsecuredcreditors@lbia-eu.com.  Please continue to check this PwC website for information on matters relating to the administration of LBIE and your potential unsecured claim. In the meantime, unsecured creditors are encouraged to embrace this initiative, to provide LBIE with their claims as a matter of priority and to respond to LBIE requests and enquiries.

This update concerns the notice of proposed distribution, which the Joint Administrators have recently given to LBIE's creditors, converting LBIE's administration into a liquidating administration.

The Joint Administrators' efforts during the first phase of LBIE's administration have been focused both on dealing with the assets held on trust by LBIE and, in parallel, on the progression of the realisation of assets for the benefit of LBIE's general unsecured creditors.

The Joint Administrators have commenced the process of organising the House Assets in preparation for making, in due course, an interim dividend to unsecured creditors. This necessitated an application by the Joint Administrators to the High Court that was made last week for the purpose of converting the administration of LBIE into a liquidating administration by obtaining permission pursuant to Paragraph 65 of Schedule B1 of the Insolvency Act 1986 to make a payment by way of distribution to unsecured creditors.  A copy of the Court's Order can be found here.

All creditors whose addresses are known to the Joint Administrators have been sent a notice pursuant to Rule 2.95 of the Insolvency Rules 1986, informing them that the Joint Administrators propose to make a distribution (by way of paying an interim dividend) to unsecured creditors. A copy of that notice can be accessed here.

The giving of the notice referred to above brings into effect the provisions of Chapter 10 of the Insolvency Rules, including those relating to set-off and those pursuant to which unsecured creditors may prove for their debts. The notice specifies 31 December 2010 as the date up to which proofs may be lodged.

Information for the methods by which claims against LBIE can be submitted are detailed here.

The Joint Administrators will continue to communicate with creditors through this website. Please continue to check this website for information on this and other matters relating to the administration of LBIE.

Please direct any queries in relation to the above to enquiries.lehmanbrothers@uk.pwc.com

The Administrators are now in a position to provide creditors with further information on the anticipated timing of the third interim distribution to unsecured creditors.

In summary, we explain in this update that:

1. it is currently anticipated that the third interim dividend will be paid on or around 29 November 2013; and
2. the last date for agreement of claims for inclusion in the third interim distribution will be 31 October 2013.

Third interim distribution to unsecured creditors

The Administrators’ tenth progress report dated 11 October 2013 will shortly be sent to all known creditors. Given the progress achieved in the period set out in the report, it is our intention to pay a third interim dividend before the end of 2013. Unsecured creditors should be aware, however, that, to allow sufficient time for inclusion in this dividend payment, creditors will need to have their claims agreed and admitted by 31 October 2013, if they have not already done so.

The rate of the third interim dividend will be determined immediately prior to its declaration, taking into account any further receipts and reduced reserves following any further settlements achieved with counterparties, as well as further rejections of claims to that date.

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 31 October 2013; and
• a third interim dividend will be payable no later than 31 December 2013, albeit the current intention is to make payment on or around 29 November 2013.

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 claims) will receive a written notification from the Administrators either prior to or at the time of the third interim dividend setting out further information, including: (i) the dividend rate; (ii) the total amount of the dividend being distributed; and (iii) the level of reserves for unsettled claims.

Other matters

Creditors should note that:

• to be eligible to receive the third interim dividend, at the start of November 2013 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.

Pursuant to Rule 2.98 of the Insolvency Rules 1986, the Joint Administrators have declared a second and interim dividend of 43.3 pence in the pound to all unsecured creditors whose claims have been admitted for dividend purposes.

This brings the cumulative dividend to 68.5 pence in the pound with further dividend payments expected in the future, although both the timing and quantum of these remain uncertain.

Payment of the second interim dividend will be made on, or around, 28 June 2013 to creditors with admitted claims. Further details of your claim and dividend calculation, if applicable, can be obtained from 5pm GMT on 21 June 2013 by accessing your user account on the Client Information Portal. Payments will be made to creditors in sterling via the Standard Settlement Instructions provided through the Client Information Portal.

In addition, the Joint Administrators confirm a first and final dividend of 100 pence in the pound being declared in respect of preferential claims (principally relating to former overseas branch employees).

• Download a copy of the Joint Administrators' notice to all creditors who have proved their debt

If you have any queries in relation to the content of this update, please call your existing LBIE contact or send an email to generalqueries@lbia-eu.com.

The creditor update on 08 May 2013 explained that the Administrators anticipated the second interim distribution to unsecured creditors would be paid on, or around, 28 June 2013.

In order to prepare for this distribution, creditors are reminded of the following:

1. Deadline for claims agreement

To be eligible to participate in the second interim distribution on this payment date, a creditor must have its claim agreed via an executed Claims Determination Deed (“CDD”) (or similar agreement) by Friday 31 May 2013.

Where a CDD cannot be executed by 31 May 2013 due solely to a requirement for the LBI settlement agreement to become unconditional and therefore the Common Terms Effective Date to occur (such as for claims which require certainty as to the settlement profile of LBI pending trades), then provided:

• a creditor has returned to LBIE a signed copy of the CDD by 31 May 2013; and
• the LBI settlement becomes unconditional during the week ending 7 June 2013 (to enable the CDD to be then countersigned by LBIE);

any such claims will be eligible to participate in payment of the second interim distribution on, or around, 28 June 2013.

2. Transfer deadline

In order to give LBIE sufficient time to arrange the necessary dividend payments, unsecured creditors who wish to transfer their claims in accordance with the transfer provisions of an executed CDD must send a Transfer Notice executed by both the Transferor and Transferee (each, as defined in the CDD) to be received by LBIE no later than 31 May 2013.

Transfer Notices should be sent to claimsdeed@lbia-eu.com and by post to Lehman Brothers International (Europe) (in administration), Level 23, 25 Canada Square, E14 5LQ, marked for the attention of: In House Legal Team.

Unsecured creditors and potential Transferees should note that any Transfer Notices received by LBIE after 31 May 2013 will not be countersigned by LBIE in time for the second interim distribution, and LBIE will proceed to pay the second interim distribution to the unsecured creditor of record according to LBIE’s records as at 31 May 2013.

Any Transfer Notices received after 31 May 2013 will be processed following payment of the second interim distribution. Until LBIE countersigns the Transfer Notice, LBIE will continue to make any payments to, and otherwise deal with, the unsecured creditor of record.

3. Change of name notification

If the name of a creditor’s legal entity has changed, creditors are reminded (if they have yet to do so) of the need to urgently notify unsecuredcreditors@lbia-eu.com, providing details of the name change together with supporting legal documentation.

Failure to do so by 31 May 2013 could result in a delay in paying such creditors their second interim distribution.

4. Confirmation of legal ownership of claim and SSIs

Unsecured creditors with an admitted claim are reminded that to be eligible to participate in the second interim distribution that they will be required to confirm that they are still the legal owner of the admitted claim and confirm their GBP Standard Settlement Instructions (“SSIs”) via LBIE’s Client Information Portal. Creditors with admitted claims will be contacted in the week commencing 10 June 2013 with regard to this process.

In the meantime, creditors should ensure that they have valid up to date log on details for LBIE’s Client Information Portal. For any queries relating to Portal access, please contact the Communications and Counterparty Management team at logons@lbia-eu.com.

Further to the announcement at the Administrators’ update webinar on 30 April 2013, the Administrators wish to provide creditors with further information on the anticipated timing of the second interim distribution to unsecured creditors and a first and final distribution to preferential creditors.

In summary, we explain in this update that:

1. it is currently anticipated that the second interim dividend (and first preferential dividend) will be paid on or around 28 June 2013; and
2. the last date for agreement of claims for inclusion in the second interim distribution (or first preferential distribution) will be 31 May 2013.

Second interim distribution to unsecured creditors

In the Administrators’ ninth progress report dated 12 April 2013, we highlighted our intention to pay a second interim dividend in the reasonably near future. This remains the case, with preparations underway to enable a second interim distribution by early summer 2013. Unsecured creditors should be aware, however, that, to allow sufficient time for inclusion in this dividend payment, creditors will need to have their claims agreed and admitted before the end of May 2013, if they have not already done so.

The rate of the second interim dividend will be determined immediately prior to its declaration, taking into account any further receipts and reduced reserves following settlements achieved with Affiliate and Street counterparties, as well as further rejections of claims to that date.

Pursuant to Rule 2.95 of the Insolvency Rules 1986, all creditors known to the Administrators were sent by post on 1 May 2013 a notice of intention to declare a dividend. This highlighted that:

• the last date for proving of debts will be 31 May 2013; and
• a second interim dividend will be payable no later than 31 July 2013, albeit the current intention is to make payment on or around 28 June 2013.

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 claims) will receive a written notification from the Administrators either prior to or at the time of the second interim dividend setting out further information, including: (i) the dividend rate; (ii) the total amount of the dividend being distributed; and (iii) the level of reserves for unsettled claims.

First and final distribution to preferential creditors

LBIE has a relatively small number of preferential claims relating to former overseas branch employees.

As part of the statutory notices highlighted above, a first and final dividend at a rate of 100% will also be announced to admitted preferential creditors. Preferential claims admitted by 31 May 2013, but which have yet to be paid, will be paid a dividend on or around 28 June 2013.

Application to the High Court to assist with future distributions

The Administrators made an application to the High Court on 26 April 2013 following which the High Court granted permission pursuant to:

• Paragraph 65(3) of Schedule B1 of the Insolvency Act 1986 to make such further distributions to unsecured creditors as they consider appropriate;
• Rule 2.97(2) of the Insolvency Rules to declare a dividend in respect of the second interim distribution to unsecured creditors on the basis that the Administrators will provide in full for certain known claims subject to/purported to be subject to an application to the High Court to reverse or vary a decision of the Administrators to reject a Proof of Debt; and
• Rule 2.97(2) of the Insolvency Rules to declare dividends in respect of any future interim distribution, notwithstanding that there may be pending applications to the High Court to reverse or vary a decision of the Administrators to reject a Proof of Debt on the basis that full provision will be made for any such disputed Proofs of Debt.

A copy of the High Court Order can be found here.

Other matters

Creditors should note that:

• to be eligible to receive the second interim dividend, at the start of June 2013, 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.

The Administrators advise that creditors wishing to participate in the fourth ‘catch up’ first interim unsecured dividend have until 30 April 2013 to meet the relevant requirements, as set out below.

The fourth ‘catch up’ unsecured dividend will be made on or around 31 May 2013, at a rate of 25.2%.

Fourth ‘catch up’ first interim unsecured dividend

The fourth ‘catch up’ unsecured dividend is available to creditors who did not participate in the first interim distribution or subsequent ‘catch up’ distributions but, as at 30 April 2013, have an admitted claim. To participate, unsecured creditors must have met the following conditions by 30 April 2013:

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

Deadline for transfer notices

In order to give LBIE sufficient time to arrange dividend payments, unsecured creditors who are to be paid the ‘catch-up’ distribution and who wish to transfer their claims (in accordance with the transfer provisions of an executed claims determination deed) must send a Transfer Notice executed by both the Transferor and Transferee (each, as defined in the claims determination deed) to be received by LBIE no later than 30 April 2013.

Transfer Notices should be sent to claimsdeed@lbia-eu.com and by post to Lehman Brothers International (Europe) (in administration), Level 23, 25 Canada Square, E14 5LQ, marked for the attention of: In House Legal Team.

Future ‘catch up’ dividends

The Administrators advise creditors that a timetable for future ‘catch up’ dividends, including deadlines for the execution of associated transfer notices will be disclosed in the Joint Administrators’ ninth progress report, which will be issued shortly.

Other matters

Should you have further questions regarding the content of this update, please contact your existing LBIE contact or the Communications and Counterparty Management team at unsecuredcreditors@lbia-eu.com.

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.

The last date for agreement of claims for inclusion in the catch-up payment of the first interim unsecured distribution is 31 January 2013.

In order to give LBIE sufficient time to arrange the necessary payments, unsecured creditors who are to be paid the catch-up distribution and who wish to transfer their claims in accordance with the transfer provisions of an executed claims determination deed must send a Transfer Notice executed by both the Transferor and Transferee (each, as defined in the claims determination deed) to be received by LBIE no later than 31 January 2013.

Transfer Notices should be sent to claimsdeed@lbia-eu.com and by post to Lehman Brothers International (Europe) (in administration), Level 23, 25 Canada Square, E14 5LQ, marked for the attention of the In House Legal Team.

Unsecured creditors who are to be paid the catch-up distribution and potential Transferees should note that any Transfer Notices received by LBIE after 31 January 2013 will not be countersigned by LBIE in time for the catch-up first interim distribution and LBIE will proceed to pay the catch-up first interim distribution to the unsecured creditor of record according to LBIE’s records as at 31 January 2013.

Any such Transfer Notices received after 31 January 2013 will be processed following payment of the catch-up first interim distribution (currently expected to be on, or around, 28 February 2013). Until LBIE countersigns the Transfer Notice, LBIE will continue make any payments to, and otherwise deal with, the unsecured creditor of record.

Please note that the above deadline does not affect creditors who were paid the first interim distribution on or around 30 November 2012. For those creditors, LBIE will continue to process and countersign Transfer Notices as normal during February 2013.

Should you have any queries regarding the content of this update please contact your existing LBIE contact or the Communications and Counterparty Management team at unsecuredcreditors@lbia-eu.com.

Creditors wishing to participate in either the “catch up” first interim unsecured dividend or the Small Claims Settlement Offer (“SCSO”) are reminded that they have until 31 January 2013 to meet the relevant requirements, as set out below.

The “catch up” unsecured dividend and SCSO payments will be made in February 2013.

“Catch up” unsecured dividend

The “catch up” unsecured dividend of 25.2% is available to creditors who did not participate in the first interim distribution but, as at 31 January 2013, have an admitted claim. To participate, unsecured creditors must have met the following conditions by 31 January 2013:

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

SCSO

The SCSO is available to any creditor who has not yet received the first interim dividend and whose agreed claim does not exceed £150,000 (or who wishes to cap their claim at this level). In full and final settlement of their claim, LBIE is offering to pay such creditors 90% of their agreed claim amount, up to a maximum payment of £135,000 (being 90% of £150,000).

Creditors wishing to participate in the SCSO must, by 31 January 2013:

• meet all the requirements listed above under “catch up” unsecured dividend; and
• enter into an additional agreement with LBIE accepting the SCSO as a full and final settlement of their admitted claim.

Please note the SCSO is available to Client Money claimants who, as part of accepting the SCSO, agree to relinquish their Client Money claim by waiving it or assigning it to a nominee of LBIE.

Should a creditor wish to participate in the SCSO, please advise LBIE by:

• logging onto LBIE’s Client Information Portal and registering interest by clicking the button under the relevant heading; or
• emailing smallclaimsoffer@lbia-eu.com; or
• contacting their existing LBIE contact.

Further information relating to the “catch up” first interim unsecured dividend and the SCSO is available in the Joint Administrators updates of 9 November 2012 and 21 December 2012.

For any queries regarding the SCSO 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.

The last date for agreement of claims for inclusion in the catch-up payment of the first interim unsecured distribution is 31 January 2013.

In order to give LBIE sufficient time to arrange the necessary payments, unsecured creditors who are to be paid the catch-up distribution and who wish to transfer their claims in accordance with the transfer provisions of an executed claims determination deed must send a Transfer Notice executed by both the Transferor and Transferee (each, as defined in the claims determination deed) to be received by LBIE no later than 31 January 2013.

Transfer Notices should be sent to claimsdeed@lbia-eu.com and by post to Lehman Brothers International (Europe) (in administration), Level 23, 25 Canada Square, E14 5LQ, marked for the attention of the In House Legal Team.

Unsecured creditors who are to be paid the catch-up distribution and potential Transferees should note that any Transfer Notices received by LBIE after 31 January 2013 will not be countersigned by LBIE in time for the catch-up first interim distribution and LBIE will proceed to pay the catch-up first interim distribution to the unsecured creditor of record according to LBIE’s records as at 31 January 2013.

Any such Transfer Notices received after 31 January 2013 will be processed following payment of the catch-up first interim distribution (currently expected to be on, or around, 28 February 2013). Until LBIE countersigns the Transfer Notice, LBIE will continue make any payments to, and otherwise deal with, the unsecured creditor of record.

Please note that the above deadline does not affect creditors who were paid the first interim distribution on or around 30 November 2012. For those creditors, LBIE will continue to process and countersign Transfer Notices as normal during February 2013.

Should you have any queries regarding the content of this update please contact your existing LBIE contact or the Communications and Counterparty Management team at unsecuredcreditors@lbia-eu.com.

Pursuant to Rule 2.98 of the Insolvency Rules 1986, the Joint Administrators have declared a first and interim dividend of 25.2 pence in the pound to all unsecured creditors whose claims have been admitted for dividend purposes. In addition, the Joint Administrators confirm a full and final settlement of 90.0 pence in the pound being made in respect of eligible claims admitted under the Small Claims Settlement Offer.

• Download a copy of the Joint Administrators' notice to all creditors who have proved their debt

The Joint Administrators wish to provide creditors with an update relating to:

1. payment of the first interim dividend and Small Claims Settlement Offer (“SCSO”);
2. progress in agreeing creditors’ claims; and
3. announcement of the Joint Administrators’ intention to pay a first “catch up” dividend to creditors whose claims were not admitted in time to participate in the first interim dividend, as well as a further opportunity for creditors to participate in the SCSO.

Payment of first interim dividend and SCSO

The Joint Administrators confirm that payment of the first interim dividend and SCSO will be on or around 30 November 2012.

The rate for the first interim dividend has been determined at 25.2%.

For those claims that have not yet been agreed by LBIE, the Administrators have made a prudent reserve in accordance with Rule 2.70(1)(b) of the Insolvency Rules 1986.

Claims agreement

Significant progress has been made in agreeing and admitting claims.  We summarise below the progress made as at 2 November 2012:

* Note: A number of creditors have incorporated within their total unsecured claim, contingent claims arising from Client Asset shortfalls. We have not sought to disaggregate these at this stage.  However, where claims have been specified as being contingent unsecured claims, they have not been reflected in the above table.

Note: The movement in submitted Proofs of Debt reflects the net impact of the withdrawal of certain claims and any new claims filed subsequent to the bar date

In summary:

• 1,598 unsecured creditor claims have been agreed, with a total value of £7.3bn.  By comparison, as at 14 September 2012, 732 claims with a total value of £3.9bn had been agreed.
• Of the agreed claims, all except 8 Street creditors and 8 Client Asset claimants (total value: £0.3bn) have been admitted for dividend purposes.
• The admitted claims include 654 counterparties (total value: £28m) that elected to participate in the SCSO.
• Offers have been made to a further 689 counterparties with a value of £1.3bn, however these have not as yet been agreed or admitted.  LBIE continues to work with these counterparties in order to progress the agreement of their claims.

40 admitted creditors (total value: £1bn) are unlikely to receive a dividend at this stage, as certain Lehman affiliates have asserted claims to the dividend payment pursuant to liens purportedly granted by the affected creditors prior to insolvency. The dividend payments will be reserved for, pending the resolution of this issue.

“Catch up” dividend

As previously advised, the deadline for creditors wishing to participate in the first interim dividend and SCSO was 2 November 2012.  Consequently, any claims that had not been admitted by that date will not participate in November’s payment of the first interim dividend or SCSO.

However, it is the Joint Administrators’ intention to pay a “catch up” first interim dividend in February 2013 to creditors who missed the 2 November deadline and whose claims are subsequently admitted.

To be eligible to receive a “catch up” dividend in February 2013, unsecured creditors must have met the following conditions by 31 January 2013:

• 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.

Please note that submission of a valid Proof of Debt does not guarantee that the claim will be capable of agreement prior to the 31 January 2013 deadline.

Re-issue of SCSO

Given the success of the SCSO, the Joint Administrators are re-issuing 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 all creditors whose claims were not admitted in time to participate in the first interim dividend or the first SCSO (“Eligible Creditors”).

Under the SCSO, the Joint Administrators are offering to make a full and final settlement to all Eligible Creditors whose claims do not exceed £150,000 (or who wish to cap their 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.

In the event that an Eligible Creditor does not participate in the SCSO, provided that its claim is admitted by the Joint Administrators by 31 January 2013, it will be entitled to participate in the “catch up” dividend, as well as any dividends thereafter.

To participate in the SCSO, in addition to the requirements listed above, Eligible Creditors will be required by 31 January 2013 to enter into an additional agreement with LBIE accepting the SCSO as full and final settlement of their admitted claim. SCSO payments will be made in February 2013.

Other matters 

Creditors should note that:

• to be eligible to receive the first interim dividend, 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.

Owing to the general business shut-down on the east coast of the United States caused by the impending hurricane, the Joint Administrators have decided to extend the deadline to agree claims in order to qualify for the first interim distribution to unsecured creditors and the Small Claims Settlement Offer to 2 November 2012.  In addition, the Joint Administrators have extended the deadline for creditors to agree transfer notices and client money assignments/waivers and to submit GBP standard settlement instructions for the first interim distribution to the same date. The payment date for the distribution is unaffected.

Should you have any queries regarding the content of this update please contact your existing LBIE contact or the Communications and Counterparty Management team at unsecuredcreditors@lbia-eu.com.

The Joint Administrators’ seventh progress report dated 12 April 2012 and eighth progress report dated 12 October 2012 outline the steps that the Administrators and counterparties need to take ahead of a declaration of first interim distributions to unsecured creditors. The last date for agreement of claims for inclusion in the first interim distribution and the Small Claims Settlement Offer is 31 October 2012.

In order to give LBIE sufficient time to arrange the necessary payments, unsecured creditors who wish to transfer their claims in accordance with the transfer provisions of an executed claims determination deed must send a Transfer Notice executed by both the Transferor and Transferee (each, as defined in the claims determination deed) to be received by LBIE no later than 31 October 2012.

Transfer Notices should be sent to claimsdeed@lbia-eu.com and by post to Lehman Brothers International (Europe) (in administration), Level 23, 25 Canada Square, E14 5LQ, marked for the attention of the In House Legal Team.

Unsecured creditors and potential Transferees should note that any Transfer Notices received by LBIE after 31 October 2012 will not be countersigned by LBIE in time for the first interim distribution and LBIE will proceed to pay the first interim distribution to the unsecured creditor of record according to LBIE’s records as at 31 October 2012.

Any Transfer Notices received after 31 October 2012 will be processed following payment of the first interim distribution (currently expected to be on, or around, 30 November 2012). Until LBIE countersigns the Transfer Notice, LBIE will continue make any payments to, and otherwise deal with, the unsecured creditor of record. 

Unsecured creditors are further reminded that to be eligible to participate in the first interim distribution or the Small Claims Settlement Offer, they are required to provide Standard Settlement Instructions (“SSIs”) via the SSI portal for a GBP bank account by 31 October 2012. SSIs as at that date will be used for the payment of the first interim distribution and the Small Claims Settlement Offer.

Should you have any queries regarding the content of this update please contact your existing LBIE contact or the Communications and Counterparty Management team at unsecuredcreditors@lbia-eu.com.

1. Small Claims Settlement Offer –Participation Deadline 31 October 2012

The Small Claims Settlement Offer, which was announced by the Joint Administrators on 4 May 2012, gives creditors the opportunity to receive a single payment in full and final settlement of their claims against LBIE.

The offer is available to any creditor whose agreed claim does not exceed £150,000 (or who wishes to cap their claim at this level). In full and final settlement of their claim,

LBIE is offering to pay such creditors 90% of the agreed claim amount, up to a maximum payment of £135,000 (being 90% of £150,000).

Any creditor wishing to participate in the Small Claims Settlement Offer must have met the following conditions by the deadline of 31 October 2012:

• submitted a valid proof of debt by the Bar Date (of 31 July 2012);
• had its claim agreed via an executed Claims Determination Deed (“CDD”) (or similar agreement); and
• entered into a separate agreement to the CDD (or similar agreement) accepting the Small Claims Settlement Offer as full and final settlement of their agreed claim (the “Small Claims Settlement Deed”).

If you wish to participate in the Small Claims Settlement Offer and have received a Small Claims Settlement Deed please return two executed (undated) copies of this document to LBIE as soon as possible (and preferably also a PDF copy by email to claimsdeed@lbia-eu.com).

If you wish to participate in the Small Claims Settlement Offer and have not already advised LBIE of this, please register your interest as soon as possible. This can be done by either:

• logging onto the LBIE Client Information Portal (“CIP”) and registering your interest by clicking the button under the relevant heading; or
• emailing smallclaimsoffer@lbia-eu.com and registering your interest; or
• contacting your existing LBIE contact.

Should you have any queries regarding the Small Claims Settlement Offer please email smallclaimsoffer@lbia-eu.com.

2. Submission of GBP SSIs

Unsecured creditors are reminded that to be eligible to participate in the First Interim Distribution or the Small Claims Settlement Offer, they are required to provide Standard Settlement Instructions (“SSIs”) for a GBP bank account.‎

If you have not already done so, please provide LBIE with the appropriate GBP SSI details by 31 October 2012.

SSIs should be submitted in the SSI Portal, which is located on the CIP home page. Please log onto the SSI Portal via the CIP using the unique username and password previously provided and enter your GBP SSI in the Cash SSI Section, choosing the “GBP Unsecured Distribution Specific SSI” option.

Please be advised that if you have previously submitted a GBP Global SSI which has been acknowledged by LBIE, there is no need to submit a GBP Unsecured Distribution Specific SSI unless you wish the First Interim Distribution to be paid to a different GBP account.

Should you have any queries regarding the submission of SSIs, please contact ‎SSI@lbia-eu.com.

Further details of the Small Claims Settlement Offer and the First Interim Dividend for Unsecured Creditors are contained in the Creditor update of 4 May 2012 and the related Frequently Asked Questions. If you require access to the CIP please contact logons@lbia-eu.com.

1. Small Claims Settlement Offer – deadline for participation

On 4 May 2012 the Joint Administrators announced their intention to offer creditors the opportunity to receive a single payment in full and final settlement of their claims against LBIE (the “Small Claims Settlement Offer”).

The offer is available to any creditor whose agreed claim amount does not exceed £150,000 (or who wishes to cap their claim to this level). In full and final settlement of the agreed claim, LBIE is offering to pay such creditors 90% of their agreed claim amount, up to a maximum payment of £135,000 (being 90% of £150,000).

If you wish to participate in the Small Claims Settlement Offer please register your interest as soon as possible. This can be done by either:

• logging onto the LBIE Client Information Portal (“CIP”) and registering your interest by clicking the button under the relevant heading;
• emailing smallclaimsoffer@lbia-eu.com and registering your interest; or
• contacting your existing LBIE contact.

In order to be eligible to participate in the Small Claims Settlement Offer, a creditor must have met the following conditions by the deadline of 31 October 2012:

• submitted a valid proof of debt by the Bar Date (of 31 July 2012) via the LBIE Client Information Portal;
• had its claim agreed via an executed Claims Determination Deed (“CDD”) (or similar agreement); and
• entered into a separate agreement to the CDD (or similar agreement) accepting the Small Claims Settlement Offer as full and final settlement of their agreed claim.

Please note that given the above requirements, registration of your interest on or close to the deadline of 31 October 2012 may not allow sufficient time to complete the necessary documentation and enable you to participate in the Small Claims Settlement Offer. You are therefore advised to register your interest as soon as possible.

Further details of the Small Claims Settlement Offer are contained in the Creditor update of 4 May 2012 and the related Frequently Asked Questions. Should you have any queries relating to the Small Claims Settlement Offer please email smallclaimsoffer@lbia-eu.com.

2. Submission of SSIs

Unsecured creditors are reminded that to be eligible to participate in the First Interim Distribution or the Small Claims Settlement Offer, they are required to provide Standard Settlement Instructions (“SSIs”) for a GBP bank account.‎

If you have not already done so, please provide these details as soon as possible. This can be done by logging onto the SSI Portal via the CIP, using the unique username and password previously provided and entering your GBP SSI in the Cash GBP Unsecured Distribution Specific SSI option. If you require logon details, please contact ‎logons@lbia-eu.com.

Should you have any queries regarding the submission of SSIs, please contact ‎SSI@lbia-eu.com.

Further to our communication of 4 May 2012, the Administrators wish to provide creditors with:

1. an update on the Proofs of Debt submitted by creditors prior to the 31 July 2012 Bar Date; and
2. further information on the anticipated timing of the first interim distribution.

In summary, we explain in this update that:

1. approximately 3,300 Proofs of Debt (with unsecured claims totalling c.£66.2bn) were received by the Administrators prior to the Bar Date, and thus are potentially eligible to participate in the first interim distribution;
2. it is currently anticipated that the first interim dividend will be paid prior to Christmas 2012, in late November/early December; and
3. from a logistical perspective, the last practical date for agreement of claims for inclusion in the first interim distribution (or Small Claims Settlement Offer) will be around 31 October 2012.

Proofs of Debt received by the Bar Date

As previously reported, on 2 May 2012 the court ordered that the last date for proving (the Bar Date) be brought forward to 31 July 2012. Below, we summarise the Proofs of Debt received at that date, as well as the level of offers made and claims agreed under the Consensual Approach:

* Note: A number of creditors have incorporated within their total unsecured claim, contingent claims arising from Client Asset shortfalls. We have not sought to disaggregate these at this stage. However, where claims have been specified as being contingent unsecured claims, they have not been reflected in the above table. In addition, the above table excludes a claim filed by LB Holdings Intermediate 2 Limited in respect of subordinated debt.

Although the level of non-Affiliate claims of c.£17.9bn exceeds the top end of the range previously estimated in our progress report dated 12 April 2012, this includes Proofs of Debt totalling c.£3.8bn that have subsequently been agreed at c.£3.1bn. Reconciliation, valuation and due diligence continues and the Administrators’ next progress report (due by 14 October 2012) will provide an updated Indicative Financial Outcome which takes account of the further progress then made.

As at 31 July 2012, inbound claims from Affiliates totalled c.£48.3bn, significantly exceeding the top end of the previously estimated range. Despite continued, extensive engagement to resolve outstanding issues (including seeking the withdrawal of the significant part of, if not the entirety of, various inbound claims which the Administrators consider have no merit at all), certain very large claims were submitted shortly prior to the Bar Date. The most notable Affiliate claims received were:

• Lehman Brothers Finance SA (Switzerland) – c.£11.2bn (of which £1.8bn is a contingent unsecured claim);
• Lehman Brothers Bankhaus AG – c.£9.2bn;
• Lehman Brothers (Luxembourg) SA – c.£11.8bn (asserted as an expense claim in the Administration and which would, if valid, be paid in priority to unsecured creditor claims);
• Lehman Brothers (Lux) Equity Finance SA – c.£8.9bn; and
• Lehman Brothers Inc. – c.£7.7bn.

It is disappointing that these claims have been submitted with such very high values, which we consider to be wholly unrealistic, but we are of course continuing our efforts to resolve them ahead of the first interim distribution. Until they are withdrawn or materially reduced, the Administrators will need to reserve for them in determining the amount of the first interim dividend.

We have much work to do to agree and admit unsecured claims which have been submitted prior to the Bar Date and as a result it is in the interests of all parties if creditors are responsive to any requests we might make for information to enable claims to be agreed in an efficient and expedient manner.

As previously advised, whilst the Administrators are seeking to agree claims under the Consensual Approach, creditors may chose to reject such an offer and elect to have their claims reviewed in detail on a bilateral basis. Any such bilateral claims agreement process will likely require further evidentiary documentation to be provided by creditors. Consequently, creditors should be aware that the time required to agree claims under this approach will be dependent upon the complexity of a counterparty’s claim, the level of additional documentation that needs to be provided, and the number of creditors that will eventually ask to have their claims dealt with by this process. In many cases, disputed claims will not be capable of being admitted before the first unsecured distribution is made.

First interim distribution

In the Administrators’ progress report dated 12 April 2012, we highlighted our intention to pay a first interim dividend before the end of 2012. This remains the case, with preparations underway to enable a first interim distribution prior to the Christmas period. Unsecured creditors should be aware, however, that to allow sufficient time for inclusion in this dividend payment, creditors will generally need to have their claims agreed and admitted before the end of October 2012.

Any creditor’s claim admitted after this date will likely miss the first interim distribution and will need to wait for a “catch up” dividend in due course. The Administrators will therefore make a prudent reserve for such claims at the time of the first interim distribution.

Owing to continuing uncertainties regarding future recoveries, the true value of Affiliate claims and the level of reserves required for third party claims that are yet to be agreed, the rate of the first interim dividend will not be finally determined until late October 2012.

Pursuant to Rule 2.98 of the Insolvency Rules 1986, all creditors whose claims have been admitted (via an executed Claims Determination Deed or similar agreement) will receive a written notification from the Administrators in November 2012 setting out further information, including: (i) the dividend rate; (ii) the total amount of the dividend being distributed; and (iii) the level of reserves for unsettled claims.

Small Claims Settlement Offer (“SCSO”)

As set out in the 4 May update, unsecured creditors whose agreed claims do not exceed £150,000 have the option to receive a full and final settlement of their claim via a single payment of 90% of their agreed claim amount. To be eligible to participate in the SCSO, creditors whose claims were submitted prior to the Bar Date must, no later than 31 October 2012:

• have their claim agreed and admitted via an executed Claims Determination Deed (or similar agreement);
• accept the Small Claims Settlement Offer (via a separate agreement, if necessary) as full and final settlement of their claim; and
• provide standard settlement instructions (SSIs) for a GBP bank account via LBIE’s Client Information Portal.

It is currently anticipated that payments under the SCSO will be made at the same time as the first interim distribution.

Other matters

Creditors should note that:

• to be eligible to receive the first interim dividend, 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.

The Joint Administrators wish to provide creditors with information about the timing of the first interim dividend and to announce the proposal of a small claims settlement offer.  Accordingly, this update confirms:

1. On 2 May 2012 the court ordered that the last date for proving be brought forward to 31 July 2012 (“Bar Date”);
2. The Joint Administrators’ intention to pay a first interim dividend to unsecured creditors within five months of the Bar Date (the “First Interim Dividend”); and
3. The Joint Administrators’ intention to offer creditors the opportunity to receive a single payment as full and final settlement of their claims (the “Small Claims Settlement Offer”).

First Interim Dividend

On 2 December 2009, the UK High Court granted the Joint Administrators permission pursuant to paragraph 65(3) of Schedule B1 to the Insolvency Act 1986 to make a distribution to unsecured creditors.

On 4 December 2009 the Joint Administrators issued a Notice of Proposed Distribution on this website, requesting that unsecured creditors submit proofs of debt by 31 December 2010, in order to qualify for a dividend.

On 10 December 2010, the UK High Court granted the Joint Administrators’ request to postpone the date by which unsecured creditors must submit their proofs of debt to 31 December 2012 in light of developments in material litigation matters, notably RASCALS and Client Money.

On 2 May 2012, the UK High Court granted the Joint Administrators’ requests to:

• bring forward the bar date to 31 July 2012;
• extend the period during which payment of the First Interim Dividend must be made from two months from the Bar Date, to within five months of the Bar Date ; and
• extend the period during which the Joint Administrators are required to admit, reject or make provision for proofs of debt submitted by unsecured creditors from a period of seven days from the Bar Date, to three months from the Bar Date.

A copy of the Court Order can be found here.

Accordingly, it is the Joint Administrators’ intention to pay the First Interim Dividend by the end of 2012.

To be eligible to participate in the First Interim Dividend, to the extent they have not already done so, unsecured creditors will be required to:

• submit a valid proof of debt by the Bar Date 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.

Please note that submission of a valid proof of debt by the Bar Date does not guarantee that the claim will be capable of agreement prior to payment of the First Interim Dividend.

The rate of the First Interim Dividend has not yet been determined.

In granting the order sought by the Joint Administrators on 2 May 2012, the UK High Court directed that any creditor of LBIE has liberty to apply to the Court to vary or discharge the order on seven days’ written notice to the Joint Administrators.

Further details of the First Interim Dividend are contained within the related Frequently Asked Questions.

Small Claims Settlement Offer

It is in the interest of LBIE’s general estate, in terms of both time and cost incurred in dealing with settling claims of creditors, to offer to make a full and final settlement to all creditors (“Eligible Creditor(s)”) whose claims do not exceed £150,000 via a single payment of 90% of their agreed claim amount. Any creditor whose agreed claim amount exceeds £150,000 may also participate, but the maximum payment made will be 90% of £150,000 (i.e. a payment of £135,000).

The payment of the Small Claims Settlement Offer will be timed to coincide with the First Interim Dividend. Creditors who opt for the Small Claims Settlement Offer will not receive a First Interim Dividend (or any subsequent dividends).

This offer is available to all of LBIE’s unsecured creditors, including LBIE’s affiliates.  Further details on eligibility are set out in the Frequently Asked Questions.

In the event that an Eligible Creditor does not wish to accept the Small Claims Settlement Offer then, provided that its claim is admitted by the Joint Administrators, it will automatically be entitled to participate in the First Interim Dividend and any subsequent dividends made over the life of the Administration.

To be eligible to participate in the Small Claims Settlement Offer, to the extent they have not already done so, Eligible Creditors will be required to:

• submit a valid proof of debt by the Bar Date via the LBIE Client Information Portal;
• have their claim agreed and admitted via an executed CDD (or similar agreement);
• enter into a separate agreement to their CDD (or similar agreement) with LBIE accepting the Small Claims Settlement Offer as full and final settlement of their admitted claim; and
• provide their SSIs for a GBP bank account.

The above requirements must be completed no later than 31 October 2012.

Eligible Creditors can apply to participate in the Small Claims Settlement Offer by logging on to the LBIE Client Information Portal and clicking the button under the relevant heading to register their interest. The final decision of acceptance is at the sole discretion of the Joint Administrators.

Further details of the Small Claims Settlement Offer are contained within the related Frequently Asked Questions.

Please note that (i) the payment percentage in respect of the Small Claims Settlement Offer is not intended to reflect the Joint Administrators’ view of the final aggregate dividend for creditors who choose not to participate in the Small Claims Settlement Offer; (ii) over the entire life of the Administration, the aggregate dividends paid to unsecured creditors could be either higher or lower than the 90% being offered under the Small Claims Settlement Offer; and (iii) the First Interim Dividend will be materially lower than 90%.  We refer you to the latest LBIE progress report for the current indicative financial outcome of the Administration, together with the various notes and caveats. Payments of the First Interim Dividend and pursuant to the Small Claims Settlement Offer will be made in GBP.

Creditors should take independent advice as to whether to participate in the Small Claims Settlement Offer.

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 and which are not dealt with in the Frequently Asked Questions, please contact your existing LBIE contact or the Communications and Counterparty Management team at unsecuredcreditors@lbia-eu.com .

Following the preliminary announcement of the Joint Third Distribution, Third True-up Distribution and Catch Up distribution on 16th March 2015, the Joint Administrators are pleased to announce that this Common Terms Distribution will be made on or around 25th June 2015. The distribution will include the release of all reserves in respect of U.S. federal income tax liabilities.

The Third Distribution will be for an amount equal to a further 4.349405479198 % of Consenting Beneficiaries’ aggregate Best Claims value.

This will be the final Common Terms Distribution from the Omnibus Trust.

No Shortfall Claims

LBIE hereby notifies all Consenting Beneficiaries that no 19/9 Shortfall Claims have arisen, and therefore no Shortfall Claim Determination Notices will be issued.

Key Dates

The relevant dates for the proposed Common Terms Distribution are as follows:

Following the preliminary announcement of the Joint Third Distribution, Third True-up Distribution and Catch Up distribution on 16th March 2015, the Joint Administrators are pleased to announce that this Common Terms Distribution will be made on or around 25th June 2015. The distribution will include the release of all reserves in respect of U.S. federal income tax liabilities.

The Third Distribution will be for an amount equal to a further 4.349405479198 % of Consenting Beneficiaries’ aggregate Best Claims value.

This will be the final Common Terms Distribution from the Omnibus Trust.

No Shortfall Claims

LBIE hereby notifies all Consenting Beneficiaries that no 19/9 Shortfall Claims have arisen, and therefore no Shortfall Claim Determination Notices will be issued.

Key Dates

The relevant dates for the proposed Common Terms Distribution are as follows:

As counterparties are aware, LBIE has analysed the character and source of the settlement payments and have withheld tax to certain counterparties.  We will fulfill our reporting obligations in respect of withholdable or reportable payments.   

For those impacted counterparties, who are ultimate beneficial owners, we will send such counterparties the appropriate US federal income tax reporting forms (i.e., Forms 1042-S and/or the relevant 1099 forms). Pursuant to US federal income tax reporting requirements, LBIE will be sending the appropriate US federal income tax reporting forms (i.e., Forms 1042-S and/or the relevant 1099 forms) directly to the ultimate beneficial owner(s) of counterparties who are non-US intermediaries (i.e., who have provided a form W-8IMY).

No counterparty that is a non-US intermediary (or any entity reflected on an allocation statement provided by a counterparty that is a non-US intermediary) will receive reporting.

Any queries should be directed in the first instance to unsecuredcreditors@lbia-eu.com.

Pursuant to Rule 2.98 of the Insolvency Rules 1986, the Joint Administrators have declared a fourth interim dividend of 7.8 pence in the pound to all unsecured creditors whose claims have been admitted for dividend purposes.

This brings the cumulative dividend to 100.0 pence in the pound, with further dividend payments dependent on some of the issues concerning creditors’ rights to the surplus beyond 100.0 pence in the pound being resolved.

Payment of the fourth interim dividend will be made on, or around, 30 April 2014 to creditors with admitted claims. Further details of your claim and dividend calculation, if applicable, are now available by accessing your user account on the Client Information Portal. Payments will be made to creditors in sterling via the Standard Settlement Instructions provided through the Client Information Portal.

• Download a copy of the Joint Administrators' notice to all creditors who have proved their debt

For any queries relating to Portal access, please contact the Communications and Counterparty Management team at logons@lbia-eu.com.

The creditor update on 28 February 2014 explained that the Administrators anticipated the fourth interim distribution to unsecured creditors would be paid on, or around, 30 April 2014.

In order to prepare for this distribution, creditors are reminded of the following:

1. Deadline for Claims Agreement

To be eligible to participate in the fourth interim distribution on this payment date, a creditor must have its claim agreed via an executed Claims Determination Deed (“CDD”) (or similar agreement) by Friday 28 March 2014.

2. Transfer Deadline

In order to give LBIE sufficient time to arrange the necessary dividend payments, unsecured creditors who wish to transfer their claims in accordance with the transfer provisions of an executed CDD must send a Transfer Notice executed by both the Transferor and Transferee (each, as defined in the CDD) to be received by LBIE no later than 28 March 2014.

Transfer Notices should be sent to claimsdeed@lbia-eu.com and by post to Lehman Brothers International (Europe) (in administration), Level 23, 25 Canada Square, E14 5LQ, marked for the attention of: In House Legal Team.

Unsecured creditors and potential Transferees should note that any Transfer Notices received by LBIE after 28 March 2014 will not be countersigned by LBIE in time for the fourth interim distribution, and LBIE will proceed to pay the fourth interim distribution to the unsecured creditor of record according to LBIE’s records as at 28 March 2014.

Any Transfer Notices received after 28 March 2014 will be processed following payment of the fourth interim distribution. Until LBIE countersigns the Transfer Notice, LBIE will continue to make any payments to, and otherwise deal with, the unsecured creditor of record.

3. Confirmation of Legal Ownership of Admitted Claim and SSIs

Unsecured creditors with an admitted claim are reminded that to be eligible to participate in the fourth interim distribution that they will be required to confirm that they are still the legal owner of the admitted claim and confirm their GBP Standard Settlement Instructions (“SSIs”) via LBIE’s Client Information Portal (CIP). Creditors with admitted claims will be contacted during the week commencing 07 April 2014 with details on how to complete the confirmation process and the timescale within which to do so.

In order to successfully complete the process within the communicated time period and be eligible to participate in the fourth interim distribution, Creditors should ensure their CIP access is up to date and, ensure that a Primary User is available in the week commencing 07 April to access the CIP for the confirmation process. For any queries relating to CIP access, please contact the Communications and Counterparty Management team at logons@lbia-eu.com.

4. Change of Name Notification

If the name of a creditor’s legal entity has changed, creditors are reminded (if they have yet to do so) of the need to urgently notify unsecuredcreditors@lbia-eu.com, providing details of the name change together with supporting legal documentation. Failure to do so by 28 March 2014 could result in a delay in paying such creditors their fourth interim distribution.

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.

On 30th October 2018 the High Court granted an Order which enables the Joint Administrators to impose a bar date by which all client money claimants must make their claims.  Our previous update about the client money bar date Order can be found here.

The Court Order may be viewed here and the associated FCA direction may be viewed here.

This update constitutes a bar date notice for the purposes of the FCA direction and the Court Order.

THE CLIENT MONEY BAR DATE WILL BE 13 DECEMBER 2018 (the “Bar Date”).

1) Claim Form

The Bar Date will be the “last date for proving” under the terms of the Order; accordingly, client money proofs (in the form of a “Client Money Claim Form”) must be lodged before the Bar Date.

Save for Existing Claimants, any client who has not already submitted a Client Money Claim Form and does not submit a Client Money Claim Form by the Bar Date will not be entitled to share in the proposed distribution.

Existing Claimants are those clients who have received “Existing Claimant Certificates”.  The Joint Administrators have sent “Existing Claimant Certificates” to the current holders of all client money entitlements which the Joint Administrators believe exist based on LBIE’s books and records, except where they do not know the email address, fax number or address of the current holder of the client money entitlement.

Existing Claimants are not required to file a Client Money Claim Form in order to be paid in the proposed distribution in respect of their Existing Claimant Amount (and any further client money sums which the Joint Administrators believe that clients are or may be entitled to receive in addition to their Existing Claimant Amounts, known as “Client Surplus Entitlements”), but Existing Claimants must confirm their payment details by the Bar Date in order to be paid (see “2) Payment Details” for further information). Existing Claimant Amounts are set out in the Existing Claimant Certificates.

It is the intention of the Joint Administrators to make a final distribution to client money clients within the period of 6 weeks from the Bar Date.

The Client Money Claim Form may be downloaded here. You will need to submit a Client Money Claim Form if:

• you have not received an Existing Claimant Certificate but you believe that you have a client money entitlement, or
• you have received an Existing Claimant Certificate, but you believe that you are entitled to more than the Existing Claimant Amount which is stated in your Existing Claimant Certificate.

The consequences of not submitting a Client Money Claim Form by the Bar Date are:

• if you have not received an Existing Claimant Certificate and you do not submit a Client Money Claim Form by the Bar Date, then LBIE and the Joint Administrators will be entitled to make a final distribution of client money without regard to any claim you might have to client money; or
• if you have received an Existing Claimant Certificate and you believe that you are entitled to more than your Existing Claimant Amount and you do not submit a Client Money Claim Form by the Bar Date, then LBIE and the Joint Administrators will be entitled to make a final distribution of client money without regard to any claim you might have in excess of your Existing Claimant Amount.

2) Payment Details

Regardless of whether they have previously accepted payment(s) in respect of their client money entitlements, all clients who have not confirmed their payment details since 1 July 2018 must do so by the Bar Date.

“Payment details” means your electronic settlement instructions or current address to which LBIE can send a cheque. The Joint Administrators intend to make distributions of client money in US dollars, therefore your settlement instructions should be for a US dollar account if you have one. Please contact LBIE at clientpositionresponses@lbia-eu.com in order to confirm your payment details.

The consequences of not confirming payment details by the Bar Date are as follows.

• If a client has not confirmed its payment details since 1 July 2018 and does not do so by the Bar Date and the client’s total remaining client money entitlement, together with any Client Surplus Entitlement, is at least USD 25, then:
  • LBIE intends to pay the value of the client’s remaining client money entitlement and/or any Client Surplus Entitlement into the Insolvency Service’s Unclaimed Dividends Account in order that the client may claim such amount from the Insolvency Service’s Unclaimed Dividends Account at any time; and
  • upon such payment into the Insolvency Service’s Unclaimed Dividends Account, the interests in client money of any such clients will cease.
• If a client has not confirmed its payment details since 1 July 2018 and does not do so by the Bar Date and the client’s total remaining client money entitlement, together with any Client Surplus Entitlement, is less than USD 25, then:
  • LBIE intends to distribute client money without regard to the client’s remaining client money entitlement and/or Client Surplus Entitlement; and
  • upon the Bar Date, the interests in client money of such clients will cease.

(Please note that “Client Surplus Entitlements” are referred to in the FCA direction to LBIE as “income entitlements”.)

If your remaining client money entitlement (together with any Client Surplus Entitlement) is paid into the Insolvency Service’s Unclaimed Dividends Account and you wish to claim the amount from the Insolvency Service’s Unclaimed Dividends Account, you should contact the Insolvency Service at: +44(0) 121 698 4268 (telephone) / Customerservices.eas@insolvency.gsi.gov.uk (email).

Queries

If you have any questions about this update please contact the Communications and Counterparty Management Team by emailing clientpositionresponses@lbia-eu.com

On 20th September 2018 the Joint Administrators applied to the High Court seeking a bar date by which all client money claimants must make their claims and with a view to paying a final client money distribution and closing the client money estate.

The application was heard on 30th October 2018. The Court granted the order which the Joint Administrators requested (as issued, the “Order”) which means that the Joint Administrators are entitled to impose a bar date.  The Order was made the same day and may be viewed here. The Order is in similar terms to the draft order which we included in our update of 15th October 2018 announcement.

The Order reflects the terms of a direction to LBIE by the FCA on 25 October 2018, which may be viewed here. The FCA’s direction amends the terms of the rules governing client money held by LBIE and will allow LBIE to make a final distribution of client money without making payments to clients who have not confirmed their payment details to LBIE since 1 July 2018 and do not do so by the bar date. Those payments will (if at least US$25) be made to the Insolvency Service as explained in more detail below.

By the terms of the Order, any client wishing to assert an entitlement to client money must lodge a Client Money Claim Form, unless they are an “Existing Claimant”.  A client is an “Existing Claimant” if they receive an “Existing Claimant Certificate” from LBIE after 29th October 2018. In the next few days we will be sending out “Existing Claimant Certificates” (in the form of emails or letters) to all clients who we believe have client money entitlements.

Action required

1) Claim Form

One week after we have sent out the Existing Claimant Certificates we intend to give notice of a client money bar date (the “Bar Date”) under the terms of the Order and the FCA direction. The Bar Date will be about four weeks after the notice of the Bar Date (the specific date will be set out in the notice).

If you receive an Existing Claimant Certificate you do not need to submit a Client Money Claim Form in order to claim for client money up to the value of your “Existing Claimant Amount” (which will be stated in your Existing Claimant Certificate).

You will need to submit a Client Money Claim Form (which we will provide a link to when we give notice of the Bar Date) if:

• you do not receive an Existing Claimant Certificate but you believe that you have a client money entitlement, or
• you do receive an Existing Claimant Certificate, but you believe that you are entitled to more than the Existing Claimant Amount which is stated in your Existing Claimant Certificate.

2) Payment Details

Whether or not you need to submit a Client Money Claim Form, all client money claimants must ensure that, before the Bar Date, regardless of whether they have previously received distributions of client money, they confirm their payment details if they have not done so since 1 July 2018.

 “Payment details” means your electronic settlement instructions or current address to which LBIE can send a cheque. We intend to make distributions of client money in US dollars, therefore your settlement instructions should be for a US dollar account if you have one. Please contact LBIE at clientpositionresponses@lbia-eu.com for information about how to confirm your payment details.

Consequences of the Bar Date

If you do not receive an Existing Claimant Certificate and you do not submit a Client Money Claim Form by the Bar Date, then LBIE and the Joint Administrators will be entitled to make a final distribution of client money without regard to any claim you might have to client money. If you receive an Existing Claimant Certificate and you believe that you are entitled to more than your Existing Claimant Amount and you do not submit a Client Money Claim Form by the Bar Date, then LBIE and the Joint Administrators will be entitled to in make a final distribution of client money without regard to any claim you might have in excess of your Existing Claimant Amount.

If you receive an Existing Claimant Certificate, have not confirmed your payment details to us since 1 July 2018 and do not do so by the Bar Date, and the value of your remaining client money distribution is at least US$25, then LBIE intends to pay the value of your remaining client money distribution into the Insolvency Service’s Unclaimed Dividends Account and upon payment into that account you will no longer have a client money claim against LBIE. If the value remaining is less than US$25 then you will no longer have a client money claim against LBIE after the Bar Date (and the money will not be paid to the Unclaimed Dividends Account). If the value of your remaining client money distribution is paid into the Insolvency Service’s Unclaimed Dividends Account you will be able to claim it from the Insolvency Service, even after LBIE’s final distribution of client money. Details for contacting the Insolvency Service to claim amounts paid to the Unclaimed Dividends Account will be set out in the Bar Date notice.

Queries

If you have any questions about this update please contact the Communications and Counterparty Management Team by emailing clientpositionresponses@lbia-eu.com.

On 15 October 2018, the Joint Administrators filed the Sixteenth Witness Statement of Russell Downs in support of their application to the High Court for a client money bar date. The Joint Administrators have also filed a draft of the Court Order which they are seeking in the application.

The client money bar date application has been listed to be heard on either 29th October 2018 or 30th October 2018. Further information on the application can be found here.

You can access a copy of the witness statement here and the draft Order here.

The application is for a bar date by which all client money claimants must make their claims with a view to paying a final client money distribution and closing the client money estate. You should contact the Communications and Counterparty Management Team (clientpositionresponses@lbia-eu.com) if you believe that you have a client money entitlement, but we have not sent you a determination of that client money entitlement or have not made a client money payment to you, or if you disagree with our determination of your client money entitlement.

Should you have any queries regarding this update, please contact LBIE’s Communications and Counterparty Management team at clientpositionresponses@lbia-eu.com.

On 20th September 2018 the Joint Administrators made an application to the High Court seeking a bar date by which all client money claimants must make their claims with a view to paying a final client money distribution and closing the client money estate.

The Joint Administrators are currently preparing their supporting evidence in respect of the application. They are also discussing the steps to be taken when closing the client money estate with the FCA. The Joint Administrators will post an update in due course to publicise their supporting evidence and the outcome of those discussions.
The application has been issued without any named respondents. However, if you are interested in being a respondent to the application please email clientpositionresponses@lbia-eu.com. Please include “Client Money Application” in the subject line of your e-mail.

The application has currently been listed to be heard on either 29th October 2018 or 30th October 2018.

Action required

On 11 July 2018 we gave Notice of our Intention to Pay a Third Interim Client Money Distribution up to 100% of client money entitlements (in aggregate with prior distributions). A number of clients who responded to our communications about that distribution have now received 100% of their client money entitlements.

If you have not received 100% of your client money entitlement, please contact the Communications and Counterparty Management Team by emailing clientpositionresponses@lbia-eu.com.

You should also contact the Communications and Counterparty Management Team (clientpositionresponses@lbia-eu.com) if you believe that you have a client money entitlement, but we have not sent you a determination of that client money entitlement or have not made a client money payment to you, or if you disagree with our determination of your client money entitlement.

The Joint Administrators believe that there is a surplus in the client money estate. They anticipate that the final distribution, which they intend to pay to client money claimants after the bar date, will provide a total recovery for client money claimants up to approximately 106% of client money entitlements. It is intended that the remaining surplus will be transferred to the LBIE unsecured estate pursuant to the statutory rules that govern the client money estate.

If you have received payment of 100% of your client money entitlement and are satisfied with our determination of your client money entitlement, then you do not need to take any action at this stage. We will be writing, in due course, to all clients with client money entitlements of which we are aware, to provide information about our determination of each client’s client money entitlement and the final distribution to which we believe they are entitled. At that point, we will ask you to confirm your payment details in order to receive the proposed final distribution.

Queries

If you have any questions about this update please contact the Communications and Counterparty Management Team by emailing clientpositionresponses@lbia-eu.com.

Following on from the First and Second Interim Client Money Distributions in April 2013 and June 2014, the Joint Administrators are pleased to announce that they intend to make a Third Interim Client Money Distribution in early August 2018. The Joint Administrators expect that this distribution will take the cumulative dividend rate declared and paid to 100%.

Action required

In order to ensure that all eligible beneficiaries have the opportunity to participate in the Third Interim Client Money Distribution, the Joint Administrators request:

• Client money claimants who believe they have a client money entitlement and who have not agreed their entitlement with LBIE should submit a client money claim form. A client money claim form can be obtained for this purpose here or by request by email to clientpositionresponses@lbia-eu.com. 
• Client money claimants who have agreed their client money entitlements with LBIE or who have already received a payment in the First and Second Interim Client Money Distributions do not need to submit a client money claim form but should provide/confirm their standard settlement instructions (“SSIs”) for a USD bank account in the SSI Portal via the LBIE Client Information Portal (the “CIP”) as soon as possible. Should you have any queries regarding the submission of SSIs, please contact SSI@lbia-eu.com.

A number of clients who would otherwise be client money claimants have executed agreements (including the Small Claims Settlement Offer) with LBIE in which they have assigned or waived their entitlements to client money, or have abandoned their client money entitlements. Those clients no longer have client money entitlements and (for the avoidance of doubt) are not required to take any further action. 

Queries

If you have any questions with regard to this update please contact the Communications and Counterparty Management Team by emailing clientpositionresponses@lbia-eu.com.