On 29 December 2009, the Joint Administrators of Lehman Brothers International (Europe) (in administration) ("LBIE"), announced that the Claim Resolution Agreement ("CRA") has become unconditional, having received the support of more than 90% of affected clients.
The CRA, developed in close consultation with the LBIE Creditors' Committee members, becomes effective between LBIE and the CRA signatories from today. The Joint Administrators anticipate commencing distributions under it shortly after the Bar Date, which was set by the High Court as 19 March 2010, earlier this month.
Steven Pearson, Joint Administrator said, "I am delighted that we have received overwhelming support for this arrangement to return assets to clients. The CRA now provides an agreed basis on which to systematically settle clients' claims and reunite them with their assets."
The CRA is a multilateral contract between LBIE and its clients which governs the basis on which assets can be returned.
Pearson added, "The implementation of the CRA illustrates the flexibility afforded to myself and my fellow LBIE Administrators under UK insolvency law and, in particular, the ability to develop practical solutions in consultation with the market."
Notes to Editor:
Steven Pearson, Tony Lomas, Dan Schwarzmann, Michael Jervis and Derek Howell, all partners at PricewaterhouseCoopers, were appointed as joint administrators to Lehman Brothers International Europe.
The LBIE Creditors' Committee members are: Ramius Credit Opportunities Master Fund Limited (Ramius LLC), GLG European Long/Short Fund, Legal and General Pensions Limited, Oceanwood Global Opportunities Master Fund and Lehman Brothers Holdings Inc.
LBIE held some $32bn of client assets on 15 September 2008. Since that date $13.3bn has been returned. The CRA enables LBIE to move to distribute the remaining trust property during 2010.
LBIE issued the Claim Resolution Agreement to affected clients in November 2009 and obtained the support of 90% of affected clients. Meetings with affected clients were held in London and New York during December to explain the terms of the agreement and to garner support.
Clients claiming Trust Assets need to provide full information relating to their claims by 19 March 2010 or risk being excluded from the distribution of such assets. Those clients who have received statements from LBIE setting out their Trust Assets need take no further action.
Ordinary unsecured creditors are not affected by this arrangement. A bar date for ordinary unsecured creditors was announced has been set as 31 December 2010. Such creditors need take no action following today's announcement.
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