Other Notices

As a consequence of Russell Downs retiring from PwC LLP on 31 December 2021, and pursuant to a court order dated 16 November 2021, Russell Downs (the “Outgoing OfficeHolder”) will be removed from office as administrator of Lehman Brothers International (Europe) - in Administration ("LBIE"), to take effect on the fourteenth day after the date of the Order.

The Outgoing Office-Holder will be replaced with Alison Campbell Grant and David James Kelly to take effect on 30 November 2021. Edward John Macnamara and Gillian Eleanor Bruce will remain in office as Joint Administrators.

The Outgoing Office-Holder will be discharged from all liability in respect of his acts and omissions and otherwise in respect of his conduct as administrator of LBIE, 28 days after advertisement of the Order in the London Gazette.

Russell Downs has made a very significant contribution to the success of the Administration over many years, most notably the approval, sanction and implementation of the Surplus Scheme, which enabled the distribution of the LBIE surplus to creditors and now shareholders. The strategies put in place by Mr Downs have led to the resolution of a number of significant matters such that the Administrators now consider that the objective of the Administration is to rescue the company as a going concern and hand back control to its directors in due course.

If any interested party requires more information, please contact LBIE’s Communications and Counterparty Management team at generalqueries@lbia-eu.com

Following the Joint Administrators’ announcements dated 21 February 2019 and 1 March 2019, Julian Guy Parr gave notice to the Court that he resigns from the office of Administrator of LBIE with effect from 8 March 2019, pursuant to paragraph 87(2)(a) of Schedule B1 to the Insolvency Act 1986 (the “Act”) and in accordance with Rule 3.64 of the Insolvency Rules (England and Wales) 2016.

An application was issued on 8 March 2019 for confirmation that Mr Parr’s resignation was effective in the form given or, in the alternative, for an order granting permission to resign as an administrator.

The application also seeks an Order pursuant to paragraph 98(2)(c) the Act that Mr Parr be discharged from liability under paragraph 98(1)) of Schedule B1 to the Act (subject to the limitations provided for in paragraph 98(4) of Schedule B1 to the Act) in respect of any action (or inaction) of his as administrator of LBIE, such discharge to take effect at a date specified by the court, save in respect of claims notified to the then current joint administrators of LBIE before that date.

A copy of the Application Notice is available here.

The Application was held before Mr Justice Hildyard on Wednesday 20 March 2019 at the Rolls Building.

A copy of the judgment can be found here and a copy of the sealed Order dated 6 September 2019 can be found here. 

Following the Joint Administrators’ announcement dated 21 February 2019, a copy of which can be found here, Julian Guy Parr, one of the administrators of LBIE, gave notice on 1 March 2019 that he intends to resign as an administrator of LBIE pursuant to Rule 3.63 of the Insolvency (England and Wales) Rules 2016.

It is considered that this resignation will be effective upon the filing with the court of a notice of resignation no less than 5 days from the giving of notice of intention to resign.  It is nonetheless intended, for the avoidance of doubt, that an application will be made to court for directions that Mr Parr’s resignation was effective in the form given or, in the alternative (if the court rules that Mr Parr’s resignation has not already been effected), for an order granting permission to resign as an administrator.  It is intended that the application will be brought on 8 March 2019. 

The application will be accompanied by an application for an Order pursuant to paragraph 98(2)(c) of Schedule B1 to the Insolvency Act 1986 (the “Act”) that Mr Parr be discharged from liability under paragraph 98(1)) of Schedule B1 to the Act (subject to the limitations provided for in paragraph 98(4) of Schedule B1 to the Act) in respect of any action (or inaction) of his as administrator of LBIE, such discharge to take effect at a date specified by the court.

There is no intention to appoint a replacement administrator.  Russell Downs, Edward John Macnamara and Gillian Eleanor Bruce will remain in office as Joint Administrators.

The approval of the Scheme of arrangement, pursuant to Part 26 of the Companies Act 2006 and the retirement of Anthony Victor Lomas Lomas from PwC LLP provided an opportunity for the named office-holders to be reviewed in LBIE and elsewhere in UK Lehman Brothers' affiliates.  Accordingly, an application to court was made to make certain changes. 

Pursuant to a court order dated 2 July 2018, it was ordered that Anthony Victor Lomas and Steven Anthony Pearson (the "Outgoing Office-Holders") each be removed as Joint Administrators of LBIE.  Both have made a very significant contribution to the success of the administration over many years.

The Outgoing Office-Holders will be replaced with Gillian Eleanor Bruce and Edward John MacNamara to take effect on 16 July 2018.  Russell Downs and Julian Guy Parr will remain in office as Joint Administrators.

The Lehman Brothers Pension Scheme has now been wound up.  Details of who to contact regarding your benefits are set out below.

Former members of the Defined Benefit Section:

Your benefits have been secured with an individual policy with Rothesay Life Plc. Rothesay Life is now responsible for paying your pension benefits when they become due.

For any queries relating to your pension benefits, please contact Rothesay Life as follows:

Phone: 0800 916 8090 or, if calling from overseas, +44 1737 227 590

Post: Ex Lehman Brothers Pension Scheme, PO Box 545, Redhill, Surrey, RH1 1YX

E-Mail: pensions.helpline@rothesaylife.co.uk

Former members of the Defined Contribution Section:

Your benefits will be payable by Fidelity Investments Life Insurance Limited. Fidelity Investments Life Insurance Limited is now responsible for paying your pension benefits when they become due.

For any queries relating to your pension benefits, please contact Fidelity as follows:

Phone: 0800 368 6868 or, if calling from overseas, +44 1737 838 585

Post: Fidelity Investments Life Insurance Limited,  Beechgate, Millfield Lane, Lower Kingswood, Tadworth, Surrey, KT20 6RP

E-Mail: pensions.service@FIL.com

In our 15th Progress Report dated 12 April 2016 we set out the policy on currency holdings which has continued to apply to date, as follows: 

The House Estate’s residual material currency risk relates to its potential obligation to pay Currency Conversion Claims, dependent upon the Waterfall appeals. The largest part of that potential liability is US dollar denominated. Accordingly, the Administrators intend to hold, and not convert, any future US dollar House receipts, including the pre-Administration Client Money surplus that is expected to transfer to it in due course. This policy will be kept under review as Waterfall appeal judgments are received and the quantum and composition of Currency Conversion Claims become clearer. 

We highlighted in our recent 17th Progress Report dated 10 April 2017 that the policy of holding US dollars in both the House estate and the pre-Administration Client Money estate as a currency hedge against the value of Currency Conversion Claims predominantly denominated in US dollars (in the event they were ultimately found to be admissible), would be reviewed in light of the UK Supreme Court Waterfall I appeal judgment. 

As notified last week, on 17 May 2017 the UK Supreme Court handed down its judgment in the Waterfall I Application, which amongst other matters found that Currency Conversion Claims do not exist. Based on this, we have urgently reviewed our currency holding policy and determined that the currency hedge maintained by holding US dollars is no longer merited. 

Therefore, next week, we will commence the orderly process of exchanging the vast majority of LBIE’s foreign currency balances to sterling, other than $120m which will be retained in the pre-Administration Client Money estate. This process is expected to take several weeks to implement in a controlled fashion.

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

On 16 June 2016 Paul Copley, one of the administrators of LBIE, gave notice that he intends to resign as an administrator of LBIE on 24 June 2016.  There is no intention to appoint a replacement administrator.  Anthony Victor Lomas, Steven Anthony Pearson, Russell Downs and Julian Guy Parr will remain in office as Joint Administrators (the “Continuing Administrators”).

The Continuing Administrators intend as soon as practicable to apply for an Order, pursuant to paragraph 98(2)(c) of Schedule B1 to the Insolvency Act 1986 (the “Act”), that Paul Copley be discharged from liability under paragraph 98(1)) of Schedule B1 to the Act (subject to the limitations provided for in paragraph 98(4) of Schedule B1 to the Act) in respect of any action (or inaction) of his as administrator of LBIE, such discharge to take effect from the date falling 42 days after LBIE’s creditors are sent the next progress report.    

In addition, the Continuing Administrators plan to take this opportunity to apply for an equivalent Order in respect of Michael John Andrew Jervis and Dan Yoram Schwarzmann.  Michael John Andrew Jervis and Dan Yoram Schwarzmannn had previously resigned as administrators of LBIE pursuant to an Order of the Court dated 2 November 2011.

Financial institutions around the world, including LBIE, are now subject to exchange of information regulations and disclosures to relevant tax authorities. As a result of these regulations, in May 2015 LBIE was required to undertake due diligence and in some cases reporting to the UK tax authority (HMRC) in relation to LBIE counterparties under US FATCA. In 2016 and 2017, in addition to US FATCA, further regulations will apply to UK financial institutions as a result of the introduction of UK FATCA and CRS (“Common Reporting Standard”).

In order to limit the information requests LBIE sends to its counterparties, whilst at the same time ensuring LBIE meets its ongoing due diligence requirements under US FATCA, UK FATCA and CRS, over the next few weeks LBIE will be contacting a large majority of its counterparties to request self-certification and US tax forms to be completed and submitted back to LBIE. It is intended, subject to counterparty’s circumstances not changing, for this to be a one-off initiative. Failure of a counterparty to complete and submit these forms to LBIE, may result in a requirement for LBIE to disclose counterparty information to relevant tax authorities.

If a counterparty has any questions about how to complete these forms they should contact their tax advisor.

Notwithstanding the intention for this to be a one-off initiative, there may be instances where LBIE is required to request further information from a counterparty in due course.

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.

15 September 2014 is the six-year anniversary of Lehman Brothers International (Europe)’s (“LBIE”) entry into administration. In light of this impending anniversary, certain creditors have made enquiries in respect of the limitation periods applicable to their claims that arose at or around the time of the commencement of the administration. The purpose of this Announcement is to provide clarity in relation to provable and non-provable claims (including any entitlement in respect of interest under rules 2.88(7) to 2.88(9) of the Insolvency Rules 1986) (“Relevant Claims”). Relevant Claims do not include any claims which were subject to a Limitation Defence (as defined below) on the date LBIE first issued a notice of proposed distribution, being 4 December 2009 (the “Relevant Date”).

To address these enquiries and to avoid:

1. a large number of requests being made of the Administrators for their consent to commence proceedings against LBIE;
2. possible applications to the Court for permission to commence such proceedings; and
3. numerous sets of “protective” proceedings being issued against LBIE,

the Administrators have caused LBIE to enter into a Deed Poll (the “Deed”). The Deed provides legal assurance to the holders of Relevant Claims (who have submitted a Proof of Debt in LBIE’s administration, or will do so on or before 15 September 2014) that LBIE will not rely upon any defence or argument based on limitation, time bar, or other defence based on the expiry of the time period within which legal proceedings must be commenced (a “Limitation Defence”), in any proceedings relating to Relevant Claims.

The Deed can be accessed here.

Do I need to take any action?

The effect of the Deed is to legally bind LBIE to the course of action detailed therein. There is no requirement for any action to be taken by any other party. In particular, the Deed is a unilateral declaration and does not need to be countersigned to have legal effect. However, creditors are reminded that they must submit a Proof of Debt on or before 15 September 2014 (if they have not already done so) in order for the Deed to apply to them.

This Announcement is intended to alert counterparties to the existence and provisions of the Deed. In the event of a conflict between this Announcement and the terms of the Deed, the terms of the Deed shall prevail.

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

The settlement of trades and the associated issues around failed and unsettled trades is one of the most significant issues facing the Lehman Brothers administrations (where this term refers to the legal entities for which PwC have been appointed as administrators in the UK).

A failed / unsettled trade is a trade that fails to settle on the previously agreed settlement date. Failure to settle principally arises if one counterparty is unable to deliver all or part of the security, or if the other counterparty fails to provide sufficient funds to meet the settlement consideration.

As with any similar organisation, Lehman Brothers was involved in high volume trading activities. There are over 140,000 failed trades across global markets involving Lehman Brothers International (Europe) (in administration). These global markets introduce their own complexity with regards to different approaches, legal requirements and rules when dealing with failed trades, including suspending and defaulting trade activity. The process for resolving these trades will therefore vary by jurisdiction and will take considerable time to complete.

In addition, there are in the region of half a million potentially failed trades in markets involving Lehman Brothers International (Europe) (in administration) settling via an Agent where there is currently no availability of the market side activity data. We are working closely with the parties involved to resolve these issues and seek resolution on all the failed and unsettled trades. The process for resolving these trades is subject to other competing complexities and will also take considerable time to complete.

The Administrators are working closely with the exchanges, clearing houses, intercompany entities and other relevant market participants involved, to resolve the failed and unsettled trades issues. We appreciate that this issue presents a significant amount of uncertainty to all parties involved, and we are therefore treating this matter as one of our highest priority issues.

We appreciate your patience and we will continue to update this website with news concerning the approach towards the resolution of the issues as they become available.

•  Failed trades - market update - 07/11/08
•  Unsettled OTC trades - 08/10/08
•  Update on OTC cash trades unsettled in CREST - 24/9/08

This section provides an update for counterparties and stakeholders of Lehman Brothers International (Europe) (in administration) ("LBIE") on the termination of Master Agreements.

The termination of Master agreements entered into between LBIE and its associated counterparties is one of the most significant areas of work for the LBIE Administrators.

Lehman Brothers was involved in a high volume of trading activity; there are over 10,000 Master Agreements requiring review and over 3,000 active trading counterparties.

In the period since 15th September 2008 a large volume of master agreement termination related correspondence has been received by LBIE. This correspondence relates to both Termination Notices, informing the Administrators of a counterparty's intention to terminate trades under the master agreement, and subsequently, Close-Out Valuations Statements ("Close-Outs") which include the value of the trades under the master agreement pending agreement by the LBIE Administrators. In addition to the above correspondence a large number of master agreement and derivative related queries have been received which we are currently working to address.

Please note that the email account for queries related to this topic is as follows.

unsecuredcreditors@lbia-eu.com.

If correspondence is sent to this address it will enter our query management system where it will be logged, tracked and addressed.

Please note that no admission is made as to the validity of any notices received by LBIE or as to the completeness, accuracy or valuation of any items alleged by counterparties in any amount specified in any Valuation Notice. 

LBIE is carrying out an exercise to determine where it may have an obligation to withhold US federal income tax and/or report to the US Internal Revenue Service in respect of US withholding tax relating to unsecured distributions to creditors. This has delayed distributions to a small number of LBIE creditors and could affect a minority of creditors, but not all. LBIE is working to resolve this matter as quickly as possible.

Important Notice - US Tax 

To ensure compliance with Treasury Department Circular 230, customers are notified that: (a) any discussion of US federal tax issues in this announcement is not intended or written to be relied upon, and cannot be relied upon, for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code; (b) such discussion is included herein by LBIE in connection with the promotion or marketing (within the meaning of Circular 230) by LBIE of the transactions or matters addressed herein; and (c) you should seek advice based on your particular circumstances from an independent tax adviser.

Important Disclaimer

The contents of this update communication are being provided to you by LBIE for information purposes only. This update does not constitute a commitment or offer on the part of LBIE or its Joint Administrators, and should not be construed as such, nor does it constitute any form of advice to the recipients. The contents of this communication are based on analysis by LBIE, which has not been audited and LBIE reserves the right without specifying any reasons to amend all or part of this communication.

Any party (including any recipients) who obtains access to and chooses to rely on this update communication (or any part thereof) will do so entirely at its own risk. No person has, nor is held out as having, any authority to give any statement, warranty, proposal or undertaking on behalf of LBIE or its Joint Administrators in connection with this communication.

LBIE and its Joint Administrators will be under no obligation to provide the recipients with access to any additional information, to update this document or to correct any inaccuracies in it which may become apparent.

LBIE and its Joint Administrators, and their respective officers, employees and agents disclaim any liability which may arise from this communication, or any other written or oral information provided in connection herewith, and any errors and/or omissions herein or therein.

Nothing contained in this update communication is an acknowledgement of any claim that a recipient or any other claimant may have against LBIE or any other entity. Neither LBIE nor its Joint Administrators shall have any liability to any recipient or to any other person in respect of the information contained herein or for any defect or incompleteness in it. No representation is made by LBIE or its Joint Administrators about any claim that may be asserted against LBIE in respect of the LBI positions or any shortfall in recovery of the LBI positions.

In the judgment of the High Court handed down on 2 November 2012, Mr Justice Briggs found that LBIE owes no obligations to its affiliates arising from the extended lien provisions that were considered by him and that LBIE’s affiliates have no rights directly to enforce such provisions against LBIE. For further details, please refer to the Joint Administrators’ previous update on the Extended Lien Application.

On 23 November 2012, 314 Commonwealth Avenue Inc. lodged an application for permission to appeal the judgment of Mr Justice Briggs. The Court of Appeal granted permission to appeal. Other parties, including LBIE, subsequently lodged applications for permission to appeal. The Joint Administrators are pleased to announce that on 17 May 2013, the appeals were dismissed by order of the Court pursuant to a consent application by all parties.

The judgment of Mr Justice Briggs is accordingly final and not subject to any further appeal.

Consequently, the Joint Administrators have considered LBIE’s position in relation to the exercise of security interests in respect of unsecured distributions and, where applicable, other assets to which LBIE's counterparties may be entitled, in circumstances where the Joint Administrators have been notified by one or more of LBIE’s affiliates that they require LBIE to withhold distributions or assets against the settlement of debts owed to them by that counterparty.

The Joint Administrators will now proceed with making such distributions (including previously withheld distributions) and with releasing assets to such counterparties as soon as is practicable, unless there are other reasons why these steps should not take place. For example, there may be circumstances where the principles set out in the judgment of Mr Justice Briggs may not apply (for example, where there is an applicable security interest in a prime brokerage agreement or other agreement not considered by the judge). Prior to release or distribution the Joint Administrators will also require that any outstanding issues between LBIE and the counterparty have been resolved.

The Joint Administrators will be writing to those entities affected by the dismissal of the appeals.

This announcement was released jointly on 26 February 2013 following finalisation of the settlements noted below.

Further to the 12 October 2012 announcement Lehman Brothers Holding Inc. (LBHI), Lehman Brothers Inc. (LBI) and Lehman Brothers International (Europe) (LBIE) have now resolved their intercompany claims. The below announcement relates to milestone agreements which resolves billions in intercompany claims and clears the path for additional distributions to LBI and LBIE customers and LBHI creditors.

The Trustee for Lehman Brothers Inc. (“LBI”), Lehman Brothers Holdings Inc. and certain of its debtor and non-debtor subsidiaries (“LBHI”), and the Joint Administrators of Lehman Brothers International (Europe) (“LBIE”) have entered into two separate agreements settling all intercompany claims between LBI on the one part, and LBHI and LBIE on the other part. The LBI Trustee today filed motions seeking approval of the agreements with the U.S. Bankruptcy Court.

These separate agreements settle billions of dollars of complex intercompany claims and liabilities between the parties. The settlement agreements also provide a final resolution of all legal and factual issues regarding intercompany relationships between LBI and LBHI and between LBI and LBIE, avoiding the need for costly litigation. The settlement agreements, along with a number of related motions, are subject to approval by the U.S. Bankruptcy Judge in the LBI Securities Investor Protection Act (SIPA) proceeding, the Honorable James M. Peck, and in the case of the agreement between LBI and LBIE, an order of the English High Court.

Upon approval, the settlements will allow LBI’s Trustee to proceed with plans to allocate and distribute sufficient cash and securities to LBI’s customer claimants, including LBHI and LBIE, to enable the LBI Trustee to satisfy valid customer claims in full. This is a critical step in obtaining significant value to return to LBIE’s counterparties included in its Omnibus Claim and to LBHI’s creditors.

As part of the resolution, the parties have also agreed to a protocol for the settlement of claims remaining against the LBI estate as the Trustee focuses on liquidating remaining assets and the allowance of general estate claims. Pursuant to the protocol following court approvals, the Trustee will file periodic, public reports regarding the general estate with the Bankruptcy Court.

James Giddens, Trustee for the liquidation of LBI, said: “After more than four years of arduous negotiations involving the analysis of hundreds of thousands of transactions with unique legal challenges, on behalf of myself and the hundreds of professionals involved, we are delighted that these agreements have been reached. We are also grateful to SIPC and the SEC for their assistance in these matters. If judicially approved and implemented, securities customers should receive full satisfaction of their claims and distributions from the general estate will be facilitated.”

Daniel Ehrmann, LBHI’s head of international operations and co-head of derivatives, said: “This milestone agreement with LBI resolves billions of dollars of complex intercompany claims, provides LBHI and its affiliates more than $2.3 billion in customer claims and $14 billion in general unsecured claims, avoids costly and extensive litigation, and contributes significantly to recoveries for LBHI’s creditors. Today’s settlement represents an enormous effort over many years by multiple dedicated professionals and powerfully underscores the benefits of reaching a consensual settlement rather than pursuing litigation. The settlement, consistent with the views of the global creditor base, will enable LBHI to accelerate distributions to creditors with allowed claims.”

Tony Lomas, LBIE Joint Administrator, said, “This is a defining transaction for the LBIE estate and one in which the whole LBIE team has played an important part. The depth and complexity of the business relationship between LBIE and LBI, the Client and House components, the different insolvency regimes and the sheer size of the claims in both directions makes this by some significant margin the most complex inter affiliate settlement completed in the Lehman insolvency. It paves the way for a $9 billion consensual asset return plan for LBIE’s underlying Omnibus claimants and will also enable us to set a clearer path to address a number of the remaining issues for our unsecured creditor estate, as well as members of our client money and client asset communities.”

The LBIE Joint Administrators continue to target the end of February to publish the terms of their consensual proposal to the underlying Omnibus claimants, on how the recovery proceeds will be distributed amongst them. In addition, LBIE intends to provide claimants with an update on the portfolio of the securities that are set to be returned under the LBI settlement agreement as well as an update into the likely financial impact of the agreement in its next progress report, due by mid-April.

Certain deal terms of both settlements are summarized below and the filings related to the LBI settlement agreement can be found at http://dm.epiq11.com/LBI/Project the “Key Documents” section.

Certain terms of the settlement agreements

Certain of the deal terms of both settlements are summarized below, however, parties should review the agreements filed with the court as those terms are controlling.

Certain key terms of the LBI/LBHI agreement are set out below:

• LBHI’s customer claims against LBI will be allowed in an amount of $2.320 billion (valued as of September 19, 2008), in respect of which LBHI will receive the following distribution: (1) a cash distribution of $1.977 billion from the LBI estate, which includes cash in lieu of certain securities and cash receipts from post-petition redemptions and maturities in connection with certain securities, (2) $350 million of consideration from Lehman ALI Inc. in the form of an assignment of a settled intercompany note between Lehman ALI Inc. and LBI to LBHI, LOTC and LBSF, and (3) the return of securities from the LBI estate.
• LBI will allow LBHI a claim for post-petition dividends and interest through December 31, 2012, of approximately $122 million, as well as any other post-petition dividends and interest collected by the Trustee with respect to securities that make up LBHI’s allowed customer claims.
• LBI will allow LBHI a $240 million priority unsecured claim in connection with certain tax-related disputes resolved through the settlemen.
• LBHI will be allowed general unsecured claims of $13.984 billion (including $1.5 billion relating to a subrogated claim by JP Morgan against LBI).
• The settlement is conditional on numerous items including the Trustee achieving 100% payout on remaining customer claims.

The key terms of the LBI/LBIE agreement (which are consistent with the outline terms agreed in principle in October 2012) are set out below.

• LBIE's Omnibus customer claim against LBI will be allowed in an amount of approximately $7.5 billion (valued as of September 19, 2008). Taking a November 30, 2012, value date, LBIE values the settled claim in the amount of approximately $8.4 billion made up of cash and securities, and this claim will be augmented by post-filing income of approximately $600 million.
• LBIE’s House claim against LBI will be allowed in an amount of exactly $500 million in cash as a customer claim and a further amount of exactly $4.0 billion as a general estate claim. LBI’s unsecured claim against LBIE will be eliminated entirely.
• LBI’s Client Money claim against LBIE and the former’s custodied assets held by LBIE will be assigned to LBIE’s nominee and LBIE respectively.
• LBI will create a reserve of exactly $777 million to deal with certain claims into LBIE from Barclays Capital Inc. arising from the LBI/Barclays Asset Purchase Agreement dated September 16, 2008.
• All litigation will cease between the parties and all other claims will be released.
• The settlement is conditional on the following:

The elimination of duplicate claims filed by claimants into the LBI estate. This is intended to ensure that no unnecessary reserves are required to be made by LBI that will dilute distributions to customer property claimants and similarly ensure that claimants do not make a double recovery.

The Trustee achieving 100% payout on remaining customer property claims.

The approval of the Post Filing Income methodology which shares post filing dividends and interest amongst customer property claimants according to the actual securities distributed by LBI.

The approval of the Trustee’s allocation motion to identify the amount of realizations to be credited as customer property.

Receipt of US Bankruptcy Court approval and an order of the English High Court for the LBI/LBIE agreement and US Bankruptcy Court approval for the LBI/LBHI agreement.

Contacts:

Stephanie Howel

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

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

The joint administrators (the "Administrators") of Lehman Brothers International (Europe) (in administration) ("LBIE") wish to inform affected clients of LBIE about the current status of its position with various Recognised Investment Exchanges ("RIE"), Recognised Overseas Investment Exchanges ("ROIE"), Recognised Clearing Houses ("RCH"), Recognised Overseas Clearing Houses ("ROCH"), Multilateral Trading Facilities ("MTF") and Designated Investment Exchanges ("DIE").

An RIE is an investment exchange, and an RCH is a clearing house, which is recognised and supervised by the FSA under the Financial Services and Markets Act 2000. The FSA has also recognised and supervises a number of ROIEs and ROCHs under the Financial Services and Markets Act 2000. An MTF brings together multiple parties buying and selling interests in financial instruments in a way that results in a contract in accordance with the rules of the FSA. A DIE is considered by the FSA to provide an appropriate degree of protection for its customers.

Please note that the list below does not detail all RIEs, ROIEs, RCHs, ROCHs, MTFs and DIEs that LBIE is currently working with. The Administrators intend to update this communication in the coming days and weeks with further information.

For further details about the rules, regulations and actions of each RIE, ROIE, RCH, ROCH, MTF and DIE, please refer to their respective websites.

Chi-X Europe Ltd ("Chi-X")

The Administrators are not aware of any outstanding trades on Chi-X.

European Multilateral Clearing Facility N.V. ("EMCF")

EMCF issued a default notice on 15 September. This led to all outstanding trades being closed by EMCF.

Turquoise

The Administrators are not aware of any outstanding trades on Turquoise.

European Central Counterparty Ltd ("EuroCCP")

EuroCCP issued a default notice on 15 September. This led to all outstanding trades being closed out by Euro CCP. All related unsettled instructions remain frozen and will not be included in the CREST settlement processing.

MEFF Renta Variable ("MEFF")

The Administrators are not aware of any outstanding trades on MEFF.

Euronext

The Administrators are not aware of any outstanding trades on Euronext.

LCH.Clearnet

The Administrators have been working with LCH.Clearnet to transfer client positions to other brokers as nominated by LBIE's clients.  This exercise is now concluded.

EUREX & Eurex Clearing AG

The Administrators have been working with Eurex Clearing AG to transfer client positions to other brokers as nominated by LBIE's clients. This exercise has largely been concluded.

Euroclear UK & Ireland Limited ("EUI")

Accounts relating to LBIE and its UK affiliates remain disabled and all related unsettled instructions remain frozen and will not be included in CREST settlement processing.  For further information regarding OTC cash trades in CREST please refer to this update

The London Metal Exchange Limited ("LME")

The Administrators are not aware of any outstanding trades on LME.

London Stock Exchange plc ("LSE")

LSE issued a default notice on 15 September 2008.  The Administrators have been working with the LSE to provide the relevant data required to ensure the LSE can calculate the appropriate net settlement due to or from LBIE.  This relates to transactions not cleared through LCH.Clearnet (see LCH.Clearnet above), but which are subject to the LSE default rules.

EDX London Ltd ("EDX")

The Administrators are not aware of any outstanding trades on EDX. 

LIFFE

The Administrators are not aware of any outstanding trades on LIFFE. 

ICE Futures Europe ("ICE")

The Administrators are not aware of any outstanding trades on ICE.

In addition the Administrators would also like to draw your attention to the current status of LBIE in regards to the following international exchanges and clearing houses which are not recognised and supervised under the FSA as detailed above:

OMX Nordic Exchanges in Copenhagen, Helsinki and Stockholm ("OMX")

The Administrators are not aware of any outstanding trades on OMX.

Powernext SA

The Administrators are not aware of any outstanding trades on Powernext SA.

European Energy Exchange AG ("EEX")

The Administrators are not aware of any outstanding trades on EEX.

The European Commodity Clearing AG ("ECC")

The Administrators are not aware of any outstanding trades on ECC.

Safex Equity Derivatives ("Safex")

The Administrators are not aware of any outstanding trades on Safex.

Vienna Stock Exchange

The Administrators are not aware of any outstanding trades on the Vienna Stock Exchange.

Borsa Italiana SpA ("Borsa Italiana")

The Administrators are not aware of any outstanding trades on Borsa Italiana.

MTS Associated Markets SA ("MTSAM")

The Administrators are not aware of any outstanding trades on MTSAM.

MTS Espana, SON ("MTS Spain")

The Administrators are not aware of any outstanding trades on MTS Spain.

MTS Amsterdam

The Administrators are not aware of any outstanding trades on MTS Amsterdam.

The Administrators would like to thank all the exchanges and clearing houses for their continued co-operation and understanding.

Further details relating to the administration are included on the PwC website www.pwc.co.uk

Notes to Editors:

AV Lomas, SA Pearson, DY Schwarzmann and MJA Jervis were appointed as Joint Administrators of Lehman Brothers International (Europe) on 15 September 2008 to manage its affairs, business and property as agents without personal liability. AV Lomas, SA Pearson, DY Schwarzmann and MJA Jervis are licensed to act as insolvency practitioners by the Institute of Chartered Accountants in England and Wales.

This document provides an account of the steps that have been taken in the Administration to 28 October 2008, together with the Administrators' proposals subsequently put to a meeting of creditors on 14 November 2008, and which provided formal notice of that meeting (Form 2.20B also enclosed).

Download a copy of the Joint Administrators' Proposals for Achieving the Purpose of Administration dated 28 October 2008.

The file below provides the results of the meeting and the modified Proposal that were sent to all known creditors on 27 November 2008.

Download a copy of the Joint Administrators' Modified Proposals and the results of the meeting.