Lehman wants subsidiary to issue securities related to swap agreement

By Lisa Kerner

Charlotte, N.C., April 28 - Lehman Brothers Special Financing Inc., Lehman Brothers Holdings Inc. and affiliated debtors asked the court for approval to take and to cause 1271 LLC to take action to issue classes of interests or securities in 1271 representing an interest in 1271 corresponding to a reference obligation governed by a swap agreement.

Actions could include amending the constitutive documents and capital structure of 1271 or changing 1271's organizational form, according to a Thursday filing with the U.S. Bankruptcy Court for the Southern District of New York.

Lehman also wants the court to OK a capital contribution of $2.5 million to 1271, its non-debtor subsidiary.

1271 LLC was created in June 2009 for the sole purpose of taking an assignment of Lehman Brothers Special Financing's interest in a swap agreement with BH Finance LLC.

A hearing is set for May 18.

New York-based Lehman Brothers Holdings Inc. was the fourth-largest investment bank in the United States. The company filed for bankruptcy on Sept. 15, 2008 in the U.S. Bankruptcy Court for the Southern District of New York. Its Chapter 11 case number is 08-13555.

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