Lehman Brothers International Europe reports 3,300 proofs of debt, plans late 2012 distribution

By Jim Witters

Wilmington, Del., Aug. 9 - Lehman Brothers International Europe's joint administrators received 3,300 proofs of debt before the July 31 bar date and plans a first interim dividend to unsecured creditors in late November or early December, according to an update filed Aug. 9.

As of July 31, the company had received 3,273 claims totaling £66.2 billion, the report states.

The company made offers totaling £5.3 billion to 1,379 claimants and obtained 525 agreements totaling £3.1 billion.

"Although the level of non-affiliate claims of about £17.9 billion exceeds the top end of the range previously estimated in our progress report dated April 12, 2012, this includes proofs of debt totaling about £3.8 billion that have subsequently been agreed at about £3.1 billion," the report states.

As of July 31, inbound claims from affiliates totaled about £48.3 billion, significantly exceeding the previously estimated range, according to the report.

"Despite continued, extensive engagement to resolve outstanding issues (including seeking the withdrawal of the significant part of, if not the entirety of, various inbound claims which the administrators consider have no merit at all), certain very large claims were submitted shortly prior to the bar date," according to the report.

The most notable affiliate claims received were:

• Lehman Brothers Finance SA (Switzerland) - £11.2 billion (of which £1.8 billion is a contingent unsecured claim);

• Lehman Brothers Bankhaus AG - £9.2 billion;

• Lehman Brothers (Luxembourg) SA - £11.8 billion (asserted as an expense claim in the administration and which would, if valid, be paid in priority to unsecured creditor claims);

• Lehman Brothers (Lux) Equity Finance SA - £8.9 billion; and

• Lehman Brothers Inc. - £7.7 billion.

"It is disappointing that these claims have been submitted with such very high values, which we consider to be wholly unrealistic, but we are of course continuing our efforts to resolve them ahead of the first interim distribution. Until they are withdrawn or materially reduced, the administrators will need to reserve for them in determining the amount of the first interim dividend," the report states.

"Owing to continuing uncertainties regarding future recoveries, the true value of affiliate claims and the level of reserves required for third party claims that are yet to be agreed, the rate of the first interim dividend will not be finally determined until late October 2012," the administrators said.

The administrators said that to be included in the first dividend distributions, claims should be agreed and admitted before October 2012.

Creditors seeking to participate in the small claims settlement offer - targeted at claims of less than £150,000 - must submit claims no later than Oct. 31, the report states.

New York-based Lehman Brothers Holdings Inc. was the fourth-largest investment bank in the United States. The company emerged from bankruptcy in the U.S. Bankruptcy Court for the Southern District of New York on March 6, 2012.

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