Update – entitlements to surplus – 28 March 2014

In the LBIE update to creditors of 28 February 2014, the Joint Administrators advised that following payment of the fourth distribution at the end of April 2014, no further distributions beyond a rate of 100 pence will be made until certain issues surrounding entitlements to the surplus which shall remain after payment of unsecured claims in full are resolved, either by way of compromise with creditors and/or litigation.

As indicated in the tenth progress report published in October 2013, the Joint Administrators have, with the benefit of extensive legal advice, engaged with a number of creditors over the past six months to understand their views in relation to claims for post administration interest and currency losses, with the objective of developing a proposal to compromise the range of different claims that have been asserted by creditors. On 10 March 2014, the Joint Administrators’ draft proposal (the “Surplus Entitlement Proposal”) was shared with a selected number of LBIE’s major creditors (the “Participants”) who had entered into a non-disclosure agreement with LBIE (the “NDA”). During the period 10 March to 28 March 2014 (the “Consultation Period”) the Joint Administrators met with the Participants to obtain their feedback on the Surplus Entitlement Proposal.

Pursuant to the terms of the NDA (which amongst other things, restricted the Participants from trading LBIE claims during the Consultation Period), upon the expiry of the Consultation Period LBIE was obliged to publish the Surplus Entitlement Proposal and further information provided to the Participants.

The Surplus Entitlement Proposal and further information, together with a list of frequently asked questions, are available via the links below. Creditors should note that the financial information contained in the following materials was based on LBIE’s books and records, was not subject to audit and should not be taken as an indication of any allocation or distribution that creditors may receive from LBIE. The information was provided for illustrative purposes only and may be subject to material change.

The Joint Administrators are considering the feedback received from Participants in relation to the Surplus Entitlement Proposal and shall update creditors on their proposed next steps in due course.

For all queries relating to the content of this update, please speak to your existing LBIE contact or send your enquiry to the Communications and Counterparty Management team at unsecuredcreditors@lbia-eu.com.

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.