Notice of additional distribution of statutory interest in respect of LBIE’s subordinated debt and notice of application to Court for directions in respect of future distributions

Given the progress made in the administration, the Joint Administrators have made a further distribution of £2 million to the subordinated creditor, bringing the total amount distributed in respect of LBIE’s subordinated debt, for both principal and interest, to £2,224 million. Statutory interest at the statutory minimum rate of 8% simple per annum has now been paid in full to the subordinated creditor.

In addition, an application has been made by the Joint Administrators to the English High Court for directions in respect of future distributions from the LBIE estate, as outlined below.

On 8 June 2020, two non-executive directors were appointed to a newly reformed LBIE board of directors to assist the Joint Administrators in the limited management of certain aspects of LBIE’s affairs.

Against that backdrop, the directors of LBIE have submitted to the Joint Administrators a request for consent that they be entitled to release surplus funds from time to time to LBIE’s sole shareholder, LB Holdings Intermediate 2 Limited (in administration).  The Joint Administrators consider that it is appropriate to seek directions from the Court as to their ability to consent to the request, including because the Joint Administrators have no express power to make a distribution directly to the shareholder.

Interested parties, including the very small number of creditors whose claims have not yet been agreed, can be assured that if the English High Court permits the Joint Administrators to consent to such a request, the position of other stakeholders will not be prejudiced in any way. In particular, all admitted creditor claims have been paid, or reserved for, in full and the Administrators hold appropriate reserves against the future expenses of the administration. The funds potentially available for distribution to LBIE’s shareholder represent a true surplus to which it is entitled.

The application notice is available here and the hearing will take place on 14 July 2020 before Mr Justice Hildyard. If any remaining creditors require further information, please contact LBIE’s Communications and Counterparty Management team at generalqueries@lbia-eu.com.