LB UK RE Holdings Limited (in administration)

This site provides information regarding the progress of the administration of LB UK RE Holdings Limited (“LB UK RE”).

On 16 November 2023 the High Court of Justice made an Order discharging the administrators. As such the administration of LB UK RE is now completed and the case is closed.

Dan Yoram Schwarzmann, Edward John Macnamara, David James Kelly and Gillian Eleanor Bruce were appointed as Joint Administrators of LB UK RE Holding Linited to manage its affairs, business and property as agents without personal liability. Dan Yoram Schwarzmann, Edward John Macnamara, David James Kelly and Gillian Eleanor Bruce are licensed in the United Kingdom to act as insolvency practitioners by the Institute of Chartered Accountants in England and Wales. The Joint Administrators are bound by the Insolvency Code of Ethics which can be found at: https://www.gov.uk/government/publications/insolvency-practitioner-code-of-ethics

Information

Timeline

In 2008, LB UK RE Holdings Limited (LB UK RE) entered administration after its parent company, Lehman Brothers Holdings Inc (LBHI), filed for Chapter 11 bankruptcy in the US.
The administrators pursued the objective of achieving a better result for creditors than a winding up, by protecting and managing LB UK RE's portfolio of assets, which included sub-performing, non-performing and performing loans (SNPLs) and real estate investments.

In 2009, the administrators developed and implemented strategies to maximise realisations from the SNPL and real estate portfolios, working closely with servicers, joint venture partners and other stakeholders.
They also submitted claims against other Lehman entities for inter-company balances and trust assets, and dealt with various operational and legal issues. The administrators reported net receipts of $389.8 million as at 14 March 2009.

In 2010, the administrators realised £60.3 million from principal investments, including hedge funds and shareholdings in companies.
They also continued to manage and sell the loan portfolios and real estate assets, generating £3 million and £7.7 million respectively.

In 2011, LBHI and certain US and UK affiliates entered into a settlement agreement that resulted in LB UK RE receiving interim dividends from the US debtors totalling $3.8 million by 2013.
The administrators also agreed all but one of the inter-company creditor balances, and pursued various legal actions and claims to protect and enhance LB UK RE's interests.

In 2012, the administrators concluded final negotiations with Lehman Brothers International (Europe) (LBIE) in relation to the return of trust assets, resulting in payments of £191.8 million to LB UK RE.
They also continued to oversee the orderly run-off of the SNPL portfolios and the realisation of the real estate investments, where possible. LBHI made another revised proposal for a CVA, which was discussed with creditors at informal meetings, but was not based on a CVA.
The administrators reported net receipts of $1,086.4 million as at 14 March 2012.

In 2013, LBHI indicated a desire to use a CVA process to compromise the liabilities and assume control of LB UK RE, and circulated a revised proposal to creditors in March 2013.
The administrators also paid a third interim dividend of 8.5 pence in the pound to creditors with agreed claims, bringing the cumulative dividend to 51.7 pence in the pound and aggregate payments to £640 million.

In 2014, the administrators completed the sale of the Portuguese loan portfolio, local servicer and securitisation vehicle, which was the largest remaining SNPL portfolio, for €222 million.
They also realised £15.1 million from real estate investments, including the sale of a private hospital facility and a deferred consideration from the Cœur Défense sale.

In 2015, the creditors and members of LB UK RE approved the CVA proposal from LBHI, which gave non-LBHI creditors the choice between taking an up-front cash payment or equity in LB UK RE.
The administrators paid a final top-up payment to non-LBHI creditors in July 2015, taking their cumulative dividend to 63 pence in the pound, and concluded the CVA.

In 2016, the administrators and the LBHI-controlled creditors, who were the only remaining creditors of LB UK RE, agreed the terms of a RATA to transfer the ownership of LB UK RE's remaining assets to the LBHI-controlled creditors by way of a distribution in specie.
The administrators also secured the release of a pension reserve that had been held against a possible liability to the Lehman Brothers Pension Scheme under a FSD.

In 2017, the administrators sought and obtained an extension of the administration to 30 November 2018, in order to finalise the position in respect of the remaining assets and deal with the legal and operational matters required to bring closure of the administration and dissolution of the company.
The administrators also completed the transfer of most of the remaining real estate and SNPL assets to the LBHI-controlled creditors, and received a tax clearance from HMRC.

In 2018, the Administrators agreed to transfer the remaining assets of LB UK RE to Lehman Brothers Holdings Inc. (LBHI) or its controlled creditors, leaving LBHI as the sole creditor of the Company.
They also sought to extend the administration beyond 30 November 2018 to finalise the position of the remaining assets and deal with the legal and operational matters required to close the administration and dissolve the Company.

In 2019, the Administrators continued to work with LBHI and the key stakeholders to progress the closure of the securitisation structure for the German portfolio and the transfer or resolution of the remaining real estate investments.
They also received corporation tax clearance from HMRC and recovered VAT refunds.
The administration was extended again to 30 November 2019 by an order of the High Court.

In 2020, the Administrators completed the transfer of the Argentinian portfolio to an acquirer in Argentina, recovering £0.4m for LB UK RE.
They also worked with LBHI to resolve the remaining issues related to the German portfolio and the indemnity granted to one of the parties to the securitisation structure.
The administration was extended for a third time to 30 November 2020 by an order of the High Court.

In 2021, the Administrators submitted all the corporation tax computations and returns for the period ended 14 September 2016 and all subsequent year-ends up to and including the year ended 14 September 2020, and received further inquiries from HMRC.
They also applied to the Court to remove one of the Joint Administrators, R Downs, who retired from PwC, and appoint DJ Kelly as a replacement. The administration was extended for a fourth time to 30 November 2021 by an order of the High Court.

In 2022, the Administrators received written confirmation from HMRC that they did not intend to raise further queries in relation to LB UK RE's tax affairs and had no objections to the company being dissolved.
They also made a final VAT claim for £107k.
The administration was extended for a fifth time to 30 November 2022 by an order of the High Court.

In 2023, the Administrators made a final payment of USD801.7k to LBHI under the terms of the RATA and the expenses deed.
They also prepared and distributed their final progress report and applied to the Court to specify the time at which their discharge from liability would take effect.
They filed a notice with the Registrar of Companies to move the Company from administration to dissolution.

Contacts

All queries to the administrators of LB UK RE should be sent to: nigel.d.rackham@pwc.com and stephen.r.ingle@pwc.com.

_{Dan Yoram Schwarzmann, Edward John Macnamara, David James Kelly and Gillian Eleanor Bruce were appointed as Joint Administrators of LB UK RE Holding Linited to manage its affairs, business and property as agents without personal liability. Dan Yoram Schwarzmann, Edward John Macnamara, David James Kelly and Gillian Eleanor Bruce are licensed in the United Kingdom to act as insolvency practitioners by the Institute of Chartered Accountants in England and Wales. The Joint Administrators are bound by the Insolvency Code of Ethics which can be found at: https://www.gov.uk/government/publications/insolvency-practitioner-code-of-ethics}

_{The Joint Administrators may act as controllers of personal data, as defined by the UK data protection law, depending upon the specific processing activities undertaken. PricewaterhouseCoopers LLP may act as a processor on the instructions of the Joint Administrators. Personal data will be kept secure and processed only for matters relating to the Joint Administrators' appointment. Further details are available in the privacy statement on the PwC.co.uk website or by contacting the Joint Administrators.}

_{LB UK RE Holdings Limited registered in England and Wales with registered no.05347966.}

_{VAT registration no. 446 9315}