Avoca CLO VIII class M subordinated noteholders OK Lehman settlement

By Caroline Salls

Pittsburgh, July 1 – Avoca CLO VIII Ltd.’s class M subordinated noteholders approved entry into a $50,000 in agreements resolving claims filed by Lehman Commercial Paper Inc. (LCPI), according to a notice released Wednesday.

According to a separate notice, Avoca CLO VII plc’s series G subordinated noteholders did not have a quorum, so their meeting to vote on a $593,000 settlement with LCPI was adjourned without passage.

As previously reported, Avoca VIII acquired a loan market association participation interest in a facility agreement between LCPI, U.K. branch and AVR Acquisitions BV. Avoca VIII was elevated to lender-of-record under that facility in September 2008.

Under the settlement, Avoca VIII will pay $50,000 to LCPI. That amount reflects a reduction in the total action value attributable to Avoca VIII of 99.1%. The initial claim value was $5.58 million.

Meanwhile, Avoca VII bought a participation interest in a facility agreement between LCPI and Gala Group Finance Ltd. In September 2008, Avoca’s rights under the Gala participation were elevated to lender-of-record from participant.

LCPI’s official committee of unsecured creditors said a forbearance agreement between Avoca VII and LCPI extended LCPI’s time to file an action against Avoca to avoid the Gala elevation as a preferential transfer.

LCPI agreed to reduce its demand in connection with the settlement, including a 91.1% reduction in the total action value attributable to Avoca. The initial claim value was $6.64 million.

Avoca is a Dublin-based credit investment management firm.

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