Updated Client Money Statements and Proposed Payments of certain Pre-Administration Client Money claims

This update concerns the following two important items:

1. Updated Client Money Statements on the Client Information Portal (the "Portal") for clients with potential claims to client money held by Lehman Brothers International (Europe) (in administration) ("LBIE") prior to the time of administration ("Pre-Administration Client Money").  For background information on the Portal and earlier client money statements, please read our 8 September 2009 and 2 December 2009 updates; and
2. Proposed payments in return for assignments of certain Pre-Administration Client Money claims.

Updated Client Money Statement:

On 15 December 2009 judgment was handed down by the High Court on the application issued by the Joint Administrators, which sought directions concerning LBIE's obligations in relation to the handling of Pre-Administration Client Money (the "Client Money Application").  Please click here to view the

15 December 2009 update

21 January 2010 update

The Joint Administrators are today providing clients with potential claims to Pre-Administration Client Money with an updated client money statement to reflect the directions given in the recent High Court judgments (the "Client Money Statement-Post Court Directions").  These statements are available to be viewed on the Portal.  Please note that:

• The information contained in each Client Money Statement-Post Court Directions is based on LBIE's books and records and relates only to Pre-Administration Client Money.
• The directions given in the recent High Court judgments are the subject of appeals and, if those appeals are partially or wholly successful, a claimant's Pre-Administration Client Money entitlement as shown in the Client Money Statement-Post Court Directions may change. 

To enable the Joint Administrators to proceed towards an interim distribution of pooled Pre-Administration Client Money as quickly as possible once all appeal proceedings in the Client Money Application have concluded, the Joint Administrators intend to seek confirmation from all clients with potential claims to Pre-Administration Client Money that they consent to these entitlements being used for the purposes of distribution.  Details of how to indicate such consent (or disagreement if clients do not consent, together with details of why they do not) will be provided on the Portal at a later date.

Proposed payments in return for assignments of certain Pre-Administration Client Money claims:

After careful consideration, the Administrators have concluded that in order to minimise the costs incurred in dealing with the various client money claims asserted against LBIE, it is in the interests of LBIE's general estate to consider paying certain smaller Pre-Administration Client Money claims in full now. Please note that the proposed payments only concern claims relating to Pre-Administration Client Money.

Outlined in the Joint Administrators' proposal on the Portal (the "Client Money Proposal") are details of:

(i)         who may be eligible to receive such a payment;

(ii)        how the size of any payment would be calculated;

(iii)       what a claimant would have to do in return for any payment;

(iv)       points a claimant should note; and

(v)        the steps a claimant should take if they wish the Joint Administrators to consider making a payment to them, including indicating this to the Joint Administrators by 28 May 2010 by the method specified in the Portal.

If a Pre-Administration Client Money claimant indicates on the Portal that they wish the Joint Administrators to consider making a payment to them and the Joint Administrators subsequently confirm that LBIE is prepared to make such a payment, then the claimant will be required to enter into an agreement, the form of which is available to be viewed on the Portal (the "Form of Agreement").

Please note that the fact that this information is being provided in the Portal to a client does not mean that the client necessarily has a claim against LBIE in respect of Pre-Administration Client Money.

All clients who are able to access this information in the Portal should consider the Client Money Proposal and the Form of Agreement carefully, and consider whether to seek legal advice in relation to them.

Portal Log on Details:

We are aware that a significant number of potential Pre-Administration Client Money claimants who were sent letters from the Joint Administrators in early September 2009 containing log on details for the Portal have not yet accessed the information in the Portal.  We strongly encourage all potential Pre-Administration Client Money claimants to access the information in the Portal and to view their Client Money Statement-Post Court Directions and the Client Money Proposal.

If you did not receive a letter from the Joint Administrators in early September containing your log on details for the Portal and believe you have a claim to Pre-Administration Client Money, please contact the clientpositionresponses@lbia-eu.com mailbox referencing your full client name and GAC code.

Please note that only authorised representatives of the legal entity to whom the September 2009 letters were sent are allowed to access the Portal on behalf of such entity.  Under no circumstances should any other person access the Portal.  Any person logging onto the Portal will be required to make a representation that he/she is authorised on behalf of the relevant entity to access the confidential information contained in the Portal.

Should you have any questions regarding the content of this update, please do not hesitate to contact the Counterparty Communications and Management team at clientpositionresponses@lbia-eu.com.

The Joint Administrators will use the Portal for client specific communications alongside the PwC Client Money website, which will remain the Joint Administrators' primary tool for general communications regarding the administration.