Lehman Brothers International (Europe) (in administration) announce an Application to seek a determination on various issues concerning contributory claims and other affiliate issues - 26 April 2016

The Joint Administrators of Lehman Brothers International (Europe) (in administration) (“LBIE”) have issued an application to Court for directions, pursuant to paragraph 63 of Schedule B1 of the Insolvency Act 1986, to determine various issues concerning contributory claims and other affiliate issues (the "Application").

There are three respondents to the Application, being the respective joint administrators of the following companies:

• Lehman Brothers Limited (“LBL”);
• LB Holdings Intermediate 2 Limited (“LBHI2”); and
• Lehman Brothers Europe Limited (“LBEL”).

The Application seeks the guidance of the Court in relation to the following issues:

• clarification of residual uncertainty, following the Waterfall I Application, as to the scope of any contribution claim LBIE may make against LBHI2 and/or LBL (the “Members”) under Section 74 Insolvency Act 1986 (“IA”);
• how insolvency set-off takes effect between a contribution claim LBIE may make against the Members and those companies’ provable claims against LBIE;
• the rights the Members may have against one another in respect of any contribution they may be required to make to LBIE’s assets under Section 74 IA;
• LBL’s ability to recharge certain liabilities to LBIE and/or LBEL and the ramifications of any such recharge; and
• further issues as to whether LBL has any liability to LBIE under Section 74 IA in any event.

The Application and accompanying Witness Statement in support of the Application are available by following the links on this page. The witness statement provides further information as to the factual background to, and the issues in, the Application. Copies of the exhibit to the witness statement can be provided on request.

Further explanation about this Application is included in our recent progress report and this Application will be referred to as “Waterfall III”.

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 Application and the administration of LBIE.