Lehman Europe, shareholder administrators look to identify obligations

By Caroline Salls

Pittsburgh, Feb. 19 - Lehman Brothers International (Europe)'s joint administrators have issued an application with the joint administrators of Lehman Brothers Ltd. and LB Holdings Intermediate 2 Ltd. to begin the process of identifying deficiency obligations, according to a news release.

Lehman Brothers (Holdings) Inc. is the sole respondent to the application.

Specifically, the joint administrators said the application begins the process of seeking to identify, to the extent that LBIE's funds for distribution are insufficient to settle the claims of ordinary unsecured creditors, what the obligations of LBIE shareholders Lehman Brothers Ltd. and LB Holdings to contribute to the ensuing deficiency will be, the provision that should be made for the contingent claim of LBIE and the respective rights between the shareholders.

The application will also address the current status of claims filed by LB Holdings and Lehman Brothers Ltd. in the administration of LBIE.

In addition, the administrators said the application will help determine the relative ranking of interest accruing on the claims of ordinary creditors and the subordinated debt claims of LB Holdings if LBIE's funds for distribution are sufficient to settle unsecured creditors' claims in full.

The LBIE joint administrator said they will argue on behalf of ordinary unsecured creditors that their claims to interest should be paid in priority, while LB Holdings and Lehman Brothers (Holdings) will be taking the contrary argument.

New York-based Lehman Brothers Holdings Inc. was the fourth-largest investment bank in the United States. The company emerged from bankruptcy on March 6, 2012.

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