Lehman Brothers U.K., Lehman Pass-Through win approval for joint plan

By Caroline Salls

Pittsburgh, March 9 – Lehman Brothers U.K. Holdings (Delaware) Inc. and Lehman Pass-Through Securities Inc. obtained confirmation of their joint Chapter 11 plan, according to an order filed Friday with the U.S. Bankruptcy Court for the Southern District of New York.

Under the plan, administrative expense claims, priority tax claims and other priority claims will be paid in full in cash.

Holders of other secured claims will either be paid in full in cash, receive the collateral securing the claim or the claim will be reinstated.

Brookfield LUK Holdings will receive 38.67% of the new class A shares of reorganized Lehman Brothers U.K., and Brookfield LPTSI Holdings will receive 42.55% of the new class A shares of reorganized Lehman Pass-Through.

General unsecured claims will be paid in full in cash, plus post-bankruptcy interest.

In exchange for existing Brookfield interests, Brookfield LUK Holdings will receive 61.33% of the new class A shares of Lehman Brothers U.K., and Brookfield LPTSI Holdings will receive 57.45% of the new class A shares of Lehman Pass-Through.

Meanwhile, in exchange for existing Lehman interests, on the effective date, Lehman Brothers Holdings Inc. will receive 100% of the new class B shares of both Lehman Brothers U.K. and Lehman Pass-Through. The Lehman Brothers U.K. class B shares will be in the amount of $345 million and the Lehman Pass-Through shares in the amount of $75 million.

According to the disclosure statement, the new class B shares will collectively have a total liquidation preference of $420 million. That amount will be reduced in the first instance dollar for dollar for all allowed fee claims and general unsecured claims and for Lehman’s share of expenses incurred during the Chapter 11 cases.

In addition, the liquidation preference will be reduced by an additional 50% of each dollar spent for all bankruptcy expenses incurred during the cases, provided that the total liquidation preference of the class B shares will not be reduced to an extent that the claims and expenses are paid for or funded in cash by Lehman Brothers Holdings.

Lehman Brothers U.K. Holdings (Delaware) and Lehman Pass-Through are affiliates of Lehman Brothers Holdings Inc. The affiliates’ Chapter 11 cases are being jointly administered under case number 17-12442. They filed for bankruptcy on Aug. 31, 2017.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.