Lehman Brothers International administrators delay dividend payment

By Caroline Salls

Pittsburgh, Nov. 30 - Lehman Brothers International Europe's joint administrators will not be able to make an upcoming unsecured and preferential creditor dividend payment as planned because of the impact of the Court of Appeal's recent client money judgment, according to a news release.

In December 2009, the joint administrators asked unsecured and preferential creditors to lodge their proofs of debt by Dec. 31 in order to qualify for a dividend that would be paid no more than two months later.

As a result of the payment delay, the joint administrators said they will apply to the High Court to extend the date by which proofs must be lodged and the proposed dividend payment made by two years.

According to the release, this is a "long stop" date to avoid, as far as possible, the need for subsequent court extensions.

However, the joint administrators said they hope to shorten this timetable and will seek to agree claims in the interim period following a consensual approach.

In addition, if and when sufficient clarity on the impact of the client money judgment can be obtained, the administrators said they will seek to move the dividend payment timetable forward, as well as the date for lodging proofs of debt.

As previously reported, the joint administrators' petition seeking the return of $1 billion of client money deposited with Lehman Brothers Bankhaus AG has been dismissed by the Frankfurt am Main Regional Court.

As a result of the dismissal, the joint administrators said the Bankhaus administrator's decision to reject the claims on behalf of Lehman Brothers International Europe clients for the $1 billion of client money stands.

If an appeal is not successful, the administrators said "there is a low likelihood of any financial recovery."

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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