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Lehman Brothers Europe granted ownership of $1.5 billion in assets
By Caroline Salls
Pittsburgh, Nov. 19 - Lehman Brothers International Europe's joint administrators said a High Court ruling has assigned ownership of securities remaining in the company's house depots to LBIE, and not to affiliates claiming ownership of the assets, according to a news release.
The administrators said they applied to the court in July 2009 for directions concerning the ownership of securities and associated cash worth in excess of $1.5 billion held in LBIE's house depots.
Some of LBIE's affiliates asserted ownership of those assets, including Lehman Brothers Finance SA, Lehman Brothers Commercial Corp. Asia Ltd., Lehman Brothers Asia Holdings Ltd., Lehman Brothers Inc. and Lehman Brothers Special Financing Inc.
According to the release, the securities in question had been acquired by LBIE before its administration for the account of the affiliates, and had been subjected to an intra-group repo/stock loan process known as "Rascals," or the Regulation and Administration of Safe Custody And globalL Settlement.
The court found that securities remaining in LBIE depots, which were subject to standard pattern Rascals processing, are owned by LBIE.
While the affiliates had acquired a beneficial interest in the securities upon their purchase from street counterparties, the administrators said the standard Rascals process transferred that beneficial ownership in the securities to LBIE via the Rascals securities repurchase agreements and stock loans.
LBIE retained beneficial ownership of the securities thereafter, except where sold to third parties, the release said.
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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