Lehman subsidiary to issue securities related to swap agreement

By Lisa Kerner

Charlotte, N.C., May 18 - Lehman Brothers Special Financing Inc., Lehman Brothers Holdings Inc. and affiliated debtors received court 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, according to a Wednesday filing with the U.S. Bankruptcy Court for the Southern District of New York.

The court also OK'd a $2.5 million capital contribution by Lehman to 1271, its non-debtor subsidiary.

As previously reported, 1271 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.

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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