UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 24, 2020
LEHMAN BROTHERS HOLDINGS INC. PLAN TRUST
(Exact name of registrant as specified in its charter)
Delaware | 1-9466 | 30-6315144 | ||
(State or other jurisdiction Of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
277 Park Avenue
New York, New York
10172
(Address of Principal Executive Offices) (Zip Code)
Registrants telephone number, including area code: (646) 285-9000
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
Not Applicaple | Not Applicaple | Not Applicaple |
Indicate by the check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐
ITEM 7.01 | Regulation FD Disclosure. |
As previously disclosed, on September 15, 2008, Lehman Brothers Holdings Inc. (LBHI) filed a voluntary petition for relief under Chapter 11 of the United States Code in the United States Bankruptcy Court for the Southern District of New York (the Bankruptcy Court). Together with the Chapter 11 cases thereafter filed by certain subsidiaries (collectively with LBHI, the Debtors), the cases are being jointly administered under the case caption In re Lehman Brothers Holdings Inc., et. al., Case Number 08-13555 (the Chapter 11 Proceeding) pursuant to Rule 1015(b) of the Federal Rules of Bankruptcy Procedure. On March 6, 2012, the Modified Third Amended Joint Chapter 11 Plan of Lehman Brothers Holdings Inc. and its Affiliated Debtors (the Plan) became effective.
As contemplated under the Plan, on September 24, 2020, LBHI, the Plan Administrator, filed the Quarterly Financial Report as of June 30, 2020, which includes Balance Sheets, and Cash Flow Estimates (collectively, the Quarterly Financial Report) of LBHI and Other Debtors and Debtor-Controlled Entities (collectively, the Company) with the Bankruptcy Court. A copy of the court filing is attached hereto as Exhibit 99.1 to this Current Report on Form 8-K.
Limitation on Incorporation by Reference
In accordance with General Instruction B.2 of Form 8-K, the information in this Item 7.01 shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act), or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.
Cautionary Statements Regarding Financial and Operating Data
The Company cautions the reader not to place undue reliance upon the information contained in the Quarterly Financial Report, as it is not prepared for the purpose of providing the basis for an investment decision directly or indirectly relating to the Company or any of its securities. The Quarterly Financial Report is not prepared in accordance with U.S. generally accepted accounting principles, is not audited or reviewed by independent accountants, will not be subject to audit or review by external auditors at any time in the future, is in a format consistent with applicable bankruptcy laws, and is subject to future adjustments and reconciliations. There can be no assurances that the Quarterly Financial Report is accurate or complete. The Quarterly Financial Report contains a further description of limitations on the information contained therein. The Quarterly Financial Report also contains information which might not be indicative of the Companys financial condition. Results set forth in the Quarterly Financial Report should not be viewed as indicative of future results.
Cautionary Statement Regarding Forward-Looking Statements
This Current Report on Form 8-K and Exhibit 99.1 hereto may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the Companys financial condition, results of operations, and business that is not historical information. Forward-looking statements reflect the Companys current views with respect to future events as well as various estimates, assumptions and comparisons based on available information up to the date of this report, many of which are subject to risks and uncertainties. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including all statements regarding information regarding the intent, belief or current expectation of the Company and members of its management. The words believe, expect, plan, intend, estimate, or anticipate and similar
expressions, as well as future or conditional verbs such as will, should, would, and could, often identify forward-looking statements. These statements speak only as of the date hereof and involve known and unknown risks, uncertainties and other factors, including factors which are outside the Companys control, which may cause the Companys actual condition, results, performance or achievements to be materially different from any future condition, results, performance or achievements expressed or implied by these forward-looking statements. Such factors include, without limitation, the potential adverse impact of the Chapter 11 Proceeding on the Companys liquidity or results of operations. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, but reserves the right to do so. Readers of this report should not place undue reliance on these forward-looking statements.
The Companys informational filings with the Bankruptcy Court, including the Quarterly Financial Report included in Exhibit 99.1, are available to the public at the office of the Clerk of the Bankruptcy Court, Alexander Hamilton Custom House, One Bowling Green, New York, New York 10004-1408. Such informational filings may be available electronically, for a fee, through the Bankruptcy Courts Internet world wide web site (www.nysb.uscourts.gov), and/or free of cost, at a world wide web site maintained by the Companys Bankruptcy Court-approved noticing agent (www.lehman-docket.com).
ITEM 9.01 | Financial Statements and Exhibits. |
(d) | Exhibits |
99.1 | Quarterly Financial Report as of June 30, 2020 which includes Balance Sheets, and Cash Flow Estimates of Lehman Brothers Holdings Inc. and Other Debtors and Debtor-Controlled Entities |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, Lehman Brothers Holdings Inc. Plan Trust has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
LEHMAN BROTHERS HOLDINGS INC. PLAN TRUST | ||||||
By Lehman Brothers Holdings Inc. as Plan Administrator | ||||||
Date: September 24, 2020 | By: | /s/ Kristine Dickson | ||||
Name: | Kristine Dickson | |||||
Title: | Chief Financial Officer |
Exhibit 99.1
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
In re:
|
Chapter 11 Case No. | |
Lehman Brothers Holdings Inc., et al., | 08-13555 | |
Jointly Administered | ||
Debtors. |
QUARTERLY FINANCIAL REPORT
AS OF JUNE 30, 2020
DEBTORS ADDRESS: | LEHMAN BROTHERS HOLDINGS INC. | |
c/o KRISTINE DICKSON CHIEF FINANCIAL OFFICER | ||
277 PARK AVENUE | ||
46th FLOOR | ||
NEW YORK, NY 10172
| ||
DEBTORS ATTORNEYS: | WEIL, GOTSHAL & MANGES LLP | |
c/o JACQUELINE MARCUS, GARRETT A. FAIL | ||
767 FIFTH AVENUE | ||
NEW YORK, NY 10153
| ||
REPORT PREPARER: | LEHMAN BROTHERS HOLDINGS INC., AS PLAN ADMINISTRATOR |
Date: September 24, 2020 |
Quarterly Financial Report as of June 30, 2020 (Unaudited)
Table of Contents
I. | Schedule of Debtors | 3 | ||||
II. | Cash Flow Estimates | 4 | ||||
III. | Notes to the Cash Flow Estimates | 7 | ||||
Note 1 - Basis of Presentation | 7 | |||||
Note 2 - Other Receipts | 10 | |||||
Note 3 - Due from/to Non-Controlled Affiliates | 11 | |||||
Note 4 - Due from/to Debtors and LBHI-Controlled Entities | 15 | |||||
Note 5 - Disputed Claims | 17 | |||||
Note 6 - Legal Proceedings | 18 | |||||
Note 7 - Taxes Payable | 22 | |||||
Note 8 - Subsequent Events | 23 | |||||
IV. | Balance Sheets | 24 |
QUESTIONS
The Company has established an email address to receive questions from readers regarding this presentation and its other financial disclosures. The Company plans to review questions received, and for those subjects which the Company determines a response would not (i) violate a confidentiality provision, (ii) place the Company in a competitive or negotiation disadvantage, or (iii) be unduly burdensome relative to the value of information requested, the Company shall endeavor to post a response on the website listed below (maintaining the anonymity of the originators of the questions). The Company assumes no obligation to respond to email inquiries.
Please email questions, with document references as relevant, to:
QUESTIONS@lehmanholdings.com
The Companys previously posted responses can be found on the Epiq website maintained for the Company:
www.lehman-docket.com under the Key Documents tab and the Responses to Questions Submitted category
Page 2 | ||||
Quarterly Financial Report as of June 30, 2020 (Unaudited)
I. Schedule of Debtors
The twenty three entities listed below (the Debtors) filed for bankruptcy in the United States Bankruptcy Court for the Southern District of New York (the Bankruptcy Court) on the dates indicated below. On December 6, 2011, the Bankruptcy Court confirmed the Modified Third Amended Joint Chapter 11 Plan of Lehman Brothers Holdings Inc. and its Affiliated Debtors (the Plan). On March 6, 2012, the Effective Date (as defined in the Plan) occurred. As of the date hereof, the following Debtors chapter 11 cases remain open:
Case No. | Date Filed (Commencement Date) |
|||||||
Lehman Brothers Holdings Inc. (LBHI) |
08-13555 | 9/15/2008 | ||||||
Lehman Brothers Special Financing Inc. (LBSF) |
08-13888 | 10/3/2008 |
The following Debtors chapter 11 cases were closed pursuant to final decrees entered by the Bankruptcy Court (Docket No. 51920, No. 54163, No. 58257, No. 59472 and No. 60623):
Case No. | Date Filed | Date Closed | ||||||||||
LB 745 LLC |
08-13600 | 09/16/2008 | 01/28/2016 | |||||||||
PAMI Statler Arms LLC |
08-13664 | 09/23/2008 | 01/28/2016 | |||||||||
CES Aviation LLC |
08-13905 | 10/05/2008 | 01/28/2016 | |||||||||
CES Aviation V LLC |
08-13906 | 10/05/2008 | 01/28/2016 | |||||||||
CES Aviation IX LLC |
08-13907 | 10/05/2008 | 01/28/2016 | |||||||||
LB 2080 Kalakaua Owners LLC |
09-12516 | 04/23/2009 | 01/28/2016 | |||||||||
LB Somerset LLC |
09-17503 | 12/22/2009 | 01/28/2016 | |||||||||
LB Preferred Somerset LLC |
09-17505 | 12/22/2009 | 01/28/2016 | |||||||||
East Dover Limited |
08-13908 | 10/05/2008 | 12/15/2016 | |||||||||
Luxembourg Residential Properties Loan Finance S.a.r.l. |
09-10108 | 01/07/2009 | 12/15/2016 | |||||||||
Merit LLC |
09-17331 | 12/14/2009 | 12/15/2016 | |||||||||
Lehman Brothers Derivative Products Inc. (LBDP) |
08-13899 | 10/05/2008 | 06/14/2018 | |||||||||
Lehman Brothers Financial Products Inc. (LBFP) |
08-13902 | 10/05/2008 | 06/14/2018 | |||||||||
Lehman Scottish Finance L.P. |
08-13904 | 10/05/2008 | 06/14/2018 | |||||||||
LB Rose Ranch LLC |
09-10560 | 02/09/2009 | 06/14/2018 | |||||||||
Lehman Brothers Commodity Services Inc. (LBCS) |
08-13902 | 10/03/2008 | 02/11/2019 | |||||||||
Lehman Brothers Commercial Corporation (LBCC) |
08-13901 | 10/05/2008 | 02/11/2019 | |||||||||
Structured Asset Securities Corporation |
09-10558 | 02/09/2009 | 02/11/2019 | |||||||||
Lehman Brothers OTC Derivatives Inc. (LOTC) |
08-13893 | 10/03/2008 | 05/04/2020 | |||||||||
Lehman Brothers Commercial Paper Inc. (LCPI) |
08-13900 | 10/05/2008 | 05/04/2020 | |||||||||
BNC Mortgage LLC |
09-10137 | 01/09/2009 | 05/04/2020 |
Page 3 | ||||
Quarterly Financial Report as of June 30, 2020 (Unaudited)
II. Cash Flow Estimates
Lehman Brothers Holdings Inc. & LBHI-Controlled Entities
($ in millions) |
As of 04/02/20 |
Cash Activity 4/3/20 - 6/30/20 |
Estimate Changes |
Transfers, Reclassifications, Adjustments |
As of 06/30/20 |
|||||||||||||||||||
CASH AND INVESTMENTS |
||||||||||||||||||||||||
Reserves for Claims |
$ | 46 | $ | | $ | (0 | ) | $ | | $ | 46 | |||||||||||||
Reserves for Operating Expenses, Incentive Fees, and Other |
123 | (10 | ) | (5 | ) | | 107 | |||||||||||||||||
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|
|
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|
|
|||||||||||||||
Total Cash & InvestmentsRestricted |
169 | (10 | ) | (6 | ) | | 153 | |||||||||||||||||
Total Cash & InvestmentsUnrestricted |
148 | 16 | 6 | | 170 | |||||||||||||||||||
|
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|
|
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|
|
|
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|
|||||||||||||||
TOTAL CASH AND INVESTMENTS [A] |
$ | 317 | $ | 6 | $ | | $ | | $ | 323 | ||||||||||||||
|
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|
|
|||||||||||||||
CASH FLOW ESTIMATES |
||||||||||||||||||||||||
Net Receipts |
||||||||||||||||||||||||
Financial Instruments |
$ | 38 | $ | (12 | ) | $ | 11 | $ | | $ | 36 | |||||||||||||
Other |
Note 2 | 74 | (2 | ) | 6 | | 78 | |||||||||||||||||
|
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|
|
|
|||||||||||||||
Sub-Total - Net Receipts |
112 | (14 | ) | 16 | | 114 | ||||||||||||||||||
Recoveries From Non-Controlled Affiliates |
Note 3 | |||||||||||||||||||||||
Europe |
1,145 | (0 | ) | (7 | ) | | 1,138 | |||||||||||||||||
Asia |
50 | | 1 | | 50 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Sub-Total - Recoveries From Non-Controlled Affiliates |
1,195 | (0 | ) | (6 | ) | | 1,188 | |||||||||||||||||
Recoveries From Controlled Affiliates |
||||||||||||||||||||||||
Pre-Petition Intercompany Receipts |
Note 4 | 5 | | 0 | | 5 | ||||||||||||||||||
Net Post-Petition Intercompany Receipts from / (Payables to) |
2 | (1 | ) | 0 | | 2 | ||||||||||||||||||
Investments in Affiliates |
2 | (2 | ) | | | | ||||||||||||||||||
|
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|
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|
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|
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Sub-Total - Recoveries From Controlled Affiliates |
9 | (3 | ) | 1 | | 7 | ||||||||||||||||||
Operating Expenses and Incentive Fees |
(123 | ) | 10 | (0 | ) | | (113 | ) | ||||||||||||||||
Estimated Taxes Payable |
Note 7 | (37 | ) | | | | (37 | ) | ||||||||||||||||
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TOTAL CASH FLOW FROM OPERATIONS + OTHER RECEIPTS [B] |
$ | 1,156 | $ | (7 | ) | $ | 10 | $ | | $ | 1,159 | |||||||||||||
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OTHER ADJUSTMENTS |
||||||||||||||||||||||||
(Less): Cash held for the benefit of third parties (a) |
$ | (36) | $ | | $ | 12 | $ | | $ | (25) | ||||||||||||||
Plus: Plan Adjustments from Participatory Debtor |
1 | | | | 1 | |||||||||||||||||||
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TOTAL OTHER ADJUSTMENTS [C] |
$ | (36) | $ | | $ | 12 | $ | | $ | (24) | ||||||||||||||
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ESTIMATED CASH AVAILABLE FOR DISTRIBUTIONS [A+B+C] |
$ | 1,438 | $ | (1 | ) | $ | 22 | $ | | $ | 1,458 | |||||||||||||
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(a) | Cash held for the benefit of third parties includes Distributions on Allowed Claims (not remitted) and other items. |
Page 4 | ||||
Quarterly Financial Report as of June 30, 2020 (Unaudited)
Lehman Brothers Special Financing Inc.
($ in millions) | As of 04/02/20 |
Cash Activity 4/3/20 - 6/30/20 |
Estimate Changes |
Transfers, Reclassifications, Adjustments |
As of 06/30/20 |
|||||||||||||||||||
CASH AND INVESTMENTS |
||||||||||||||||||||||||
Reserves for Claims |
$ | 3 | $ | | $ | (1 | ) | $ | (2 | ) | $ | 0 | ||||||||||||
Reserves for Operating Expenses, Incentive Fees, and Other |
3 | (0 | ) | 1 | 2 | 5 | ||||||||||||||||||
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Total Cash & Investments - Restricted |
6 | (0 | ) | (1 | ) | | 5 | |||||||||||||||||
Total Cash & Investments - Unrestricted |
4 | (1 | ) | 1 | | 4 | ||||||||||||||||||
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TOTAL CASH AND INVESTMENTS [A] |
$ | 10 | $ | (1 | ) | $ | | $ | | $ | 9 | |||||||||||||
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CASH FLOW ESTIMATES |
||||||||||||||||||||||||
Net Receipts |
||||||||||||||||||||||||
Financial Instruments |
$ | 7 | $ | (1 | ) | $ | 1 | $ | | $ | 7 | |||||||||||||
Other |
Note 2 | 1 | (0 | ) | 0 | | 0 | |||||||||||||||||
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Sub-Total - Net Receipts |
8 | (1 | ) | 1 | | 8 | ||||||||||||||||||
Recoveries From Non-Controlled Affiliates |
Note 3 | |||||||||||||||||||||||
Europe |
| | | | | |||||||||||||||||||
Asia |
| | | | | |||||||||||||||||||
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Sub-Total - Recoveries From Non-Controlled Affiliates |
| | | | | |||||||||||||||||||
Recoveries From Controlled Affiliates |
||||||||||||||||||||||||
Pre-Petition Intercompany Receipts |
Note 4 | | | | | | ||||||||||||||||||
Net Post-Petition Intercompany Receipts from / (Payables to) |
(3 | ) | 1 | (0 | ) | | (2 | ) | ||||||||||||||||
Investments in Affiliates |
| | | | | |||||||||||||||||||
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Sub-Total - Recoveries From Controlled Affiliates |
(3 | ) | 1 | (0 | ) | | (2 | ) | ||||||||||||||||
Operating Expenses and Incentive Fees |
(4 | ) | 0 | (0 | ) | | (4 | ) | ||||||||||||||||
Estimated Taxes Payable |
Note 7 | | | | | | ||||||||||||||||||
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TOTAL CASH FLOW FROM OPERATIONS + OTHER RECEIPTS [B] |
$ | 1 | $ | 1 | $ | (0 | ) | $ | | $ | 2 | |||||||||||||
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OTHER ADJUSTMENTS |
||||||||||||||||||||||||
(Less): Cash held for the benefit of third parties |
$ | (0 | ) | $ | | $ | 0 | $ | | $ | (0 | ) | ||||||||||||
(Less): Plan Adjustments to Participatory Debtor |
(1 | ) | | | | (1 | ) | |||||||||||||||||
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TOTAL OTHER ADJUSTMENTS [C] |
$ | (1 | ) | $ | | $ | 0 | $ | | $ | (1 | ) | ||||||||||||
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ESTIMATED CASH AVAILABLE FOR DISTRIBUTIONS [A+B+C] |
$ | 10 | $ | 0 | $ | 0 | $ | | $ | 10 | ||||||||||||||
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Page 5 | ||||
Quarterly Financial Report as of June 30, 2020 (Unaudited)
Estimated Remaining Creditor Recoveries, By Debtor
The following schedules show the estimated remaining recoveries for each of LBHI and LBSF by claim class, based on the Estimated Cash Available for Distributions in the preceding tables. The estimated remaining recoveries on the previous pages and the schedules below do not include (a) potential recoveries from the Excluded Litigations, and (b) estimates for potential allowed amounts of disputed claims.
($ in millions)
Lehman Brothers Holdings Inc.
Allowed Claims Eligible for Distributions (1) |
Estimated Remaining Recovery |
Estimated Remaining Recovery % as of 06.30.2020 |
Actual Recovery % Thru D20 |
Estimated End of Case Recovery % |
||||||||||||||||||
Class |
Designation |
$ | $ | A | B | = A + B | ||||||||||||||||
3 |
Senior Unsecured | $ | 82,542 | $ | 747 | 0.905 | % | 46.049 | % | 46.954 | % | |||||||||||
4A |
Senior Affiliate Claims | 33,571 | 271 | 0.808 | % | 37.052 | % | 37.859 | % | |||||||||||||
4B |
Senior Affiliate Guarantee | 10,463 | 83 | 0.790 | % | 36.154 | % | 36.944 | % | |||||||||||||
5 |
Senior Third-Party Guarantee | 31,706 | 200 | 0.632 | % | 28.928 | % | 29.559 | % | |||||||||||||
7 |
General Unsecured | 5,242 | 44 | 0.840 | % | 43.113 | % | 43.953 | % | |||||||||||||
8 |
Derivative Affiliate / Affiliate Guarantee Claims | 451 | 3 | 0.742 | % | 34.041 | % | 34.783 | % | |||||||||||||
9A |
Third Party Guarantee Derivatives | 18,255 | 108 | 0.594 | % | 27.230 | % | 27.824 | % | |||||||||||||
9B |
Third Party Guarantee Derivatives RACERs | | | 0.361 | % | 16.555 | % | 16.916 | % | |||||||||||||
10A |
Subordinated Class 10A Claims | 3,399 | | | | | ||||||||||||||||
10B |
Subordinated Class 10B Claims | 10,330 | | | | | ||||||||||||||||
10C |
Subordinated Class 10C Claims | 1,493 | | | | | ||||||||||||||||
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|||||||||||||||||||
Total | $ | 197,453 | $ | 1,458 | ||||||||||||||||||
|
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|
|
Lehman Brothers Special Financing Inc.
Allowed Claims Eligible for Distributions (1) |
Estimated Remaining Recovery |
Estimated Remaining Recovery % as of 06.30.2020 |
Actual Recovery % Thru D20 |
Estimated End of Case Recovery % |
||||||||||||||||||
Class |
Designation |
$ | $ | A | B | = A + B | ||||||||||||||||
4A |
GUC not Designated Entities | $ | 19,675 | $ | 5 | 0.026 | % | 40.365 | % | 40.391 | % | |||||||||||
4B |
GUC Designated Entities | 1,948 | 0 | 0.014 | % | 20.467 | % | 20.480 | % | |||||||||||||
5A |
Affiliate Claims of LBHI | 15,173 | 4 | 0.028 | % | 40.954 | % | 40.982 | % | |||||||||||||
5B |
Affiliate Claims of Participating Subs | 522 | 0 | 0.022 | % | 33.650 | % | 33.672 | % | |||||||||||||
5C |
Affiliate claims | 1,689 | 0 | 0.026 | % | 39.864 | % | 39.890 | % | |||||||||||||
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|||||||||||||||||||
Total | $ | 39,006 | $ | 10 | ||||||||||||||||||
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|
(1) | Estimated Recovery percentages are calculated based on recoveries of Allowed Claims Eligible for Distributions as reported on Exhibit D of the 20th Distribution Notice filed on March 26, 2020 [Docket No. 60487]. For purposes of this illustrative calculation only: |
a. | Allowed claims exclude (i) claims against LBHI satisfied in full through the combination of the primary obligor and guarantee distributions from LBHI, and (ii) previously Allowed Claims that have been withdrawn. |
b. | Disputed claims are assumed to be allowed at zero, and all cash reserves currently held on behalf of holders of disputed claims are assumed to be released for the benefit of all holders of Allowed Claims. |
c. | Allowed Claims Eligible for Distributions exclude Allowed Claims that each Debtor owns against itself. |
(2) | Through the twentieth Plan Distribution on April 2, 2020 (D20), the Debtors have made distributions to creditors totaling $128.1 billion, of which $95.2 billion were payments on account of claims owned or formerly owned by third party creditors. |
Page 6 | ||||
Quarterly Financial Report as of June 30, 2020 (Unaudited)
III. Notes to the Cash Flow Estimates
Note 1 Basis of Presentation
Page 7 | ||||
Quarterly Financial Report as of June 30, 2020 (Unaudited)
Page 8 | ||||
Quarterly Financial Report as of June 30, 2020 (Unaudited)
Note 1 Basis of Presentation (continued)
Page 9 | ||||
Quarterly Financial Report as of June 30, 2020 (Unaudited)
Note 2 Other Receipts
The following table summarizes the main components of Other Receipts as of June 30, 2020:
Debtors | LBHI- | |||||||||||
Controlled | ||||||||||||
$ in millions |
LBHI | LBSF | Entities | |||||||||
Affiliate Claims (1) |
73 | | 0 | |||||||||
Other |
1 | 0 | 3 |
(1) | Includes $73 million of claims, marked at estimated recovery values, against Non-Controlled Affiliates acquired through settlements with third parties valued at estimated recoveries, net of distributions. The largest component of Affiliate Claims is an admitted claim, prior to distributions, against Lehman Brothers Limited for £66 million. |
Page 10 | ||||
Quarterly Financial Report as of June 30, 2020 (Unaudited)
Note 3 Due from/to Non-Controlled Affiliates
The following table presents, on an aggregate basis for LBHI and LBHI-Controlled Entities, admitted claims (including statutory interest to date), collections to date from Non-Controlled Affiliates, and aggregate estimated remaining recoveries (including statutory interest):
Estimated Recoveries (4) |
||||||||||||||||||||||||||||
$ in millions |
Local Currency |
Admitted Claims in Local Currency (2) |
Collections To Date in Local Currency (2) |
Admitted and Unsettled Filed Claims in USD (3) |
Collections To Date in USD (2) |
Net Receivables in USD |
LBHI & LBHI- Controlled Entities |
|||||||||||||||||||||
Europe |
||||||||||||||||||||||||||||
Lehman Brothers Finance S.A. |
CHF | 10,153 | (2,087 | ) | 10,722 | (2,203 | ) | 8,519 | ||||||||||||||||||||
Lehman Brothers Holdings Intermediate 2 Ltd |
GBP | 871 | (871 | ) | 1,853 | (1,080 | ) | 773 | ||||||||||||||||||||
Thayer Properties Limited |
GBP | 172 | (92 | ) | 213 | (115 | ) | 98 | ||||||||||||||||||||
LB (PTG) Ltd |
GBP | 170 | (91 | ) | 211 | (112 | ) | 98 | ||||||||||||||||||||
LB ODC 3 |
GBP | 101 | (62 | ) | 125 | (77 | ) | 49 | ||||||||||||||||||||
Other |
2,293 | (2,251 | ) | 42 | ||||||||||||||||||||||||
Recoveries of Prior Guarantee Distributions (1) |
| | | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total Europe |
15,417 | (5,838 | ) | 9,579 | 1,138 | |||||||||||||||||||||||
Asia |
||||||||||||||||||||||||||||
LB Commercial Corp. Asia Limited |
HKD | 14,769 | (9,118 | ) | 1,906 | (1,176 | ) | 729 | ||||||||||||||||||||
LB Asia Pacific (Singapore) PTE |
USD | 621 | (364 | ) | 621 | (364 | ) | 258 | ||||||||||||||||||||
LB Investments PTE Ltd |
USD | 536 | (342 | ) | 536 | (342 | ) | 194 | ||||||||||||||||||||
LB RE Australia Commerical PTY LTD |
AUD | 218 | (66 | ) | 150 | (46 | ) | 105 | ||||||||||||||||||||
LB Australia Holdings PTY LTD |
AUD | 145 | (63 | ) | 100 | (43 | ) | 57 | ||||||||||||||||||||
Lehman Brothers Australia Ltd |
AUD | 111 | (66 | ) | 77 | (46 | ) | 31 | ||||||||||||||||||||
Other |
11,091 | (11,050 | ) | 41 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total Asia |
14,482 | (13,067 | ) | 1,415 | 50 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total |
$ | 29,899 | $ | (18,905 | ) | $ | 10,994 | $ | 1,188 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Totals may not foot due to rounding. |
(1) | The Companys Estimated Recoveries include estimates for recoveries related to prior distributions on Allowed Guarantee Claims against LBHI that are or are expected to be satisfied in full. |
(2) | Admitted Claims in Local Currency, Collections to Date in Local Currency and Collections to Date in USD include statutory interest received to date less any distributions received on the claims prior to the assignments of the claims to LBHI and/or LBHI-Controlled Entities. |
(3) | Admitted and Unsettled Filed Claims in USD includes estimated recoveries on subordinated receivables and statutory interest. |
(4) | Refer to Note 1 Basis of Presentation herein for further information on the estimated recoveries from Non-Controlled Affiliates. |
(5) | Other claims against Lehman Brothers Finance S.A., Bankhaus, and LBIE acquired through settlements with third parties are included in Other Assets (refer to Note 2 Other Receipts for additional information). |
Page 11 | ||||
Quarterly Financial Report as of June 30, 2020 (Unaudited)
Note 3 Due from/to Non-Controlled Affiliates (continued)
The table below presents the Due from/to Non-Controlled Affiliates balances as of June 30, 2020, and the related activity since the previously filed Quarterly Financial Report as of April 2, 2020:
Activity 04/03/20 - 06/30/20 | ||||||||||||||||||||||||
$ in millions | As of April 2, 2020 |
Cash Receipts | Cash Distributions |
Claim Assignments |
Other (1) | As of June 30, 2020 |
||||||||||||||||||
Due From Non-Controlled |
||||||||||||||||||||||||
Debtors: |
||||||||||||||||||||||||
Lehman Brothers Holdings Inc. |
$ | 9,943 | $ | (0 | ) | $ | | $ | | $ | 266 | $ | 10,209 | |||||||||||
LBHI-Controlled |
804 | (0 | ) | | | (20 | ) | 784 | ||||||||||||||||
Due To Non-Controlled (2) |
||||||||||||||||||||||||
Debtors: |
||||||||||||||||||||||||
Lehman Brothers Holdings Inc. |
$ | 28,861 | $ | | $ | | $ | | $ | | $ | 28,861 | ||||||||||||
LBHI-Controlled |
30 | | | | | 30 |
(1) | Other includes $247 million resulting from the positive impact of movements in foreign exchange rates for the period calculated on the historical net receivable balances. |
(2) | Due to Non-Controlled balances from Debtors are included in Liabilties Subject to Compromise herein. |
Page 12 | ||||
Quarterly Financial Report as of June 30, 2020 (Unaudited)
Note 3 Due from/to Non-Controlled Affiliates (continued)
The following table presents a summary of Due from/to Non-Controlled Affiliates balances as of June 30, 2020:
LBHI | LBSF | LBHI-Controlled Entities |
||||||||||||||||||||||
$ in millions |
Due from | Due to | Due from | Due to | Due from | Due to | ||||||||||||||||||
Europe |
||||||||||||||||||||||||
Lehman Brothers Treasury Co B.V. (1) |
$ | | $ | (12,351 | ) | $ | | $ | | $ | | $ | | |||||||||||
Lehman Brothers Finance S.A. |
8,519 | (670 | ) | | | | | |||||||||||||||||
Thayer Properties Limited |
98 | | | | | | ||||||||||||||||||
LB (PTG) Ltd |
98 | | | | | | ||||||||||||||||||
Lehman Brothers Limited |
1 | (232 | ) | | (2 | ) | | (0 | ) | |||||||||||||||
Lehman Brothers International (Europe) (2) |
37 | (650 | ) | | (518 | ) | | (1 | ) | |||||||||||||||
Eldon Street Holdings Limited |
| (19 | ) | | | | | |||||||||||||||||
LB Holdings Intermediate 2 Ltd |
| (196 | ) | | | 773 | | |||||||||||||||||
Wood Street Investments Ltd |
| (174 | ) | | | | | |||||||||||||||||
Storm Funding Ltd |
(0 | ) | (113 | ) | | (3 | ) | | | |||||||||||||||
Asia |
||||||||||||||||||||||||
LB Commercial Corp. Asia Limited |
729 | | | | | | ||||||||||||||||||
LB Asia Pacific (Singapore) PTE |
258 | | | | | | ||||||||||||||||||
LB Investments PTE Ltd |
194 | | | | | | ||||||||||||||||||
Other |
||||||||||||||||||||||||
Claims held by third parties (3) |
| (14,385 | ) | | (180 | ) | | | ||||||||||||||||
Other |
275 | (71 | ) | (0 | ) | (67 | ) | 11 | (28 | ) | ||||||||||||||
Totals may not foot due to rounding. |
(1) | LBT is included in the defined term Non-Controlled Affiliates, but LBHI has no direct or indirect equity interest in LBT. |
(2) | LBHI owns allowed claims against LBIE in the aggregate face amount of £646 million. |
(3) | Claims held by third parties represent claims against Debtors, net of distributions, originally held by Non-Controlled Affiliates, according to their respective settlement agreements with the Company, that are currently held by third parties. |
Page 13 | ||||
Quarterly Financial Report as of June 30, 2020 (Unaudited)
Note 3 Due from/to Non-Controlled Affiliates (continued)
Page 14 | ||||
Quarterly Financial Report as of June 30, 2020 (Unaudited)
Note 4 Due from/to Debtors and LBHI-Controlled Entities
The table below presents the Due from/to Debtors and LBHI-Controlled Entities balances as of June 30, 2020, and the related activity since the previously filed Quarterly Financial Report as of April 2, 2020:
Activity 04/03/20 - 06/30/20 | ||||||||||||||||||||||||
$ in millions | As of April 2, 2020 |
Cash Receipts | Cash Distributions |
Claim Assignments |
Other (1) | As of June 30, 2020 |
||||||||||||||||||
Due From Controlled |
||||||||||||||||||||||||
Lehman Brothers Holdings Inc. |
$ | 19,083 | (2 | ) | $ | | $ | | $ | (127 | ) | $ | 18,955 | |||||||||||
LBHI-Controlled |
1 | (0 | ) | 1 | ||||||||||||||||||||
Due To Controlled (3) |
||||||||||||||||||||||||
Lehman Brothers Holdings Inc. |
$ | (0 | ) | $ | | | $ | (0 | ) | $ | (0 | ) | ||||||||||||
Lehman Brothers Special Financing Inc. |
10,019 | | | | $ | | 10,019 | |||||||||||||||||
LBHI-Controlled |
8,540 | (2 | ) | (127 | ) | 8,412 |
(1) | Includes debt forgiveness of $127 million related to the wind down of an LBHI-Controlled Entity. |
(2) | Due to Controlled balances from Debtors are included in Liabilities Subject to Compromise herein. |
Page 15 | ||||
Quarterly Financial Report as of June 30, 2020 (Unaudited)
Note 4 Due from/to Debtors and LBHI-Controlled Entities (continued)
The following table presents a summary of Due from/to Debtors and LBHI-Controlled Entities balances for Debtors as of June 30, 2020:
LBHI | LBSF | |||||||||||||||
$ in millions |
Due from | Due to | Due from | Due to | ||||||||||||
Lehman Brothers Holdings Inc |
$ | | $ | | $ | | $ | (10,018 | ) | |||||||
LB Special Financing Inc |
10,018 | | | | ||||||||||||
RACERS Claims (1) |
525 | | | | ||||||||||||
Lehman Ali Inc: |
||||||||||||||||
Lehman Ali Inc (PCO) |
1,928 | | | | ||||||||||||
LB I Group Inc: |
||||||||||||||||
LB I Group Inc (PCO) |
1,569 | | | | ||||||||||||
LB Offshore Partners Ltd |
340 | | | | ||||||||||||
314 Commonwealth Ave Inc: |
||||||||||||||||
314 Commonwealth Ave Inc (PCO) |
784 | 0 | | | ||||||||||||
Other: |
||||||||||||||||
Pami Ali LLC |
2,731 | (0 | ) | | | |||||||||||
Real Estate Private Equity Inc |
625 | | | | ||||||||||||
Repe LBREP LP, LLC |
180 | | | | ||||||||||||
Other |
254 | 0 | | | ||||||||||||
PCO parent company only |
(1) | Refer to Section IV.I.b of the Disclosure Statement for further information on the RACERS Claims. |
Page 16 | ||||
Quarterly Financial Report as of June 30, 2020 (Unaudited)
Note 5 Disputed Claims
The table below presents the remaining Disputed Claims by Class and by Primary Obligor as of June 30, 2020:
$ in millions | ||||||||||||||||||||
Debtor/Class |
Total Number of Filed Claims |
Number of Unliquidated Claims |
Total Filed Amount |
Estimate of Disputed Claims for Reserve Purposes (2) |
Total Cash Reserves for Disputed Claims (3) |
|||||||||||||||
Lehman Brothers Holdings Inc. |
||||||||||||||||||||
2 Secured |
1 | 1 | $ | 6 | $ | | $ | | ||||||||||||
5 Senior Third-Party Guarantee (1) |
1 | | 8 | 5 | 0 | |||||||||||||||
LBIE |
1 | | 8 | 5 | 0 | |||||||||||||||
9A Third Party Guarantee other than of the RACERS Trusts (1) |
64 | | 1,075 | 810 | 26 | |||||||||||||||
LBIE |
63 | | 1,013 | 748 | 21 | |||||||||||||||
LBF |
1 | | 62 | 62 | 5 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total - Lehman Brothers Holdings Inc. |
66 | 1 | $ | 1,089 | $ | 815 | $ | 26 |
(1) | The Disputed Claims relate to asserted guarantee obligations related to the primary obligor. |
(2) | Certain Claims have been estimated at less than filed amounts, for reserve purposes only, as agreed through stipulation or settlement agreement or pursuant to Court order. Unless otherwise agreed to or ordered by the Court, there is no reserve for unliquidated Claims. |
(3) | In addition to cash, assets are being maintained as reserves for certain claims pursuant to agreements with creditors and/or Bankruptcy Court order. |
Page 17 | ||||
Quarterly Financial Report as of June 30, 2020 (Unaudited)
Note 6 Legal Proceedings
The Company is involved in or will be impacted by a number of judicial, regulatory and mediation proceedings concerning matters arising in connection with the bankruptcy proceedings and various other matters, including the proceedings listed below. The Company has not included in the June 30, 2020 Cash Flow Estimates any estimate of recoveries for the Excluded Litigations in the table shown below, but has included estimates of recoveries for all other affirmative litigation matters it is pursuing. The Company is not aware of any other litigation matters where the amount at issue exceeds $10 million. As more information becomes available, the Company may record revisions, which may be material, in future Quarterly Financial Reports. (See Note 1Basis of PresentationLitigation for further discussion on the impact of these litigations on the cash flow estimates.)
EXCLUDED LITIGATIONS |
||||||||||
Counterparty |
Debtor(s) |
Commenced |
Court |
Court Reference |
Most Recent | |||||
Mortgage Sellers | LBHI | Various | Various | Various | (a) | |||||
Bank of America National Association et al. (SPV Avoidance Actions) | LBSF | September 2010 | Bankruptcy Court | 10-03547 (SCC) | (b) | |||||
Ballyrock ABS CDO 2007-1 Limited Wells Fargo Bank N.A. (Ballyrock Litigation) |
LBSF | February 2009 | Bankruptcy Court | 09-01032 (SCC) | (b) |
OTHER LITIGATIONS |
||||||||
Counterparty |
Controlled Entities Party |
Debtor(s) Potentially Impacted by Litigation |
Court |
Most Recent | ||||
PLC, LBHI2, LB GP No. 1 Ltd, Deutsche Bank (ECAPs) |
LBHI SLP3 |
LBHI | UK Court | (c) | ||||
Guarantee Claims For Which LBIE Is The Primary Obligor | LBHI | LBHI | Bankruptcy Court | (d) | ||||
LBIE Other | None | LBHI | Various | (e) | ||||
LBF Guarantee - Enasarco | None | LBHI | Swiss Court | April 5, 2018 Balance Sheets - Docket No. 58442 | ||||
Guarantee Clawbacks | LBHI | LBHI | Bankruptcy Court | (f) | ||||
LBT Clawbacks | LBHI | LBHI | Bankruptcy Court | (g) | ||||
Sweetwater | LBHI | LBHI | Delaware Chancery Court | (h) |
Page 18 | ||||
Quarterly Financial Report as of June 30, 2020 (Unaudited)
Note 6 Legal Proceedings (continued)
Page 19 | ||||
Quarterly Financial Report as of June 30, 2020 (Unaudited)
Page 20 | ||||
Quarterly Financial Report as of June 30, 2020 (Unaudited)
Page 21 | ||||
Quarterly Financial Report as of June 30, 2020 (Unaudited)
Page 22 | ||||
Quarterly Financial Report as of June 30, 2020 (Unaudited)
Page 23 | ||||
IV. | Balance Sheets |
($ in millions) |
Lehman Brothers Holdings Inc. 08-13555 |
Lehman Brothers Special Financing Inc. 08-13888 |
Total Debtor Entities (1) |
Total LBHI- Controlled Entities (2) |
Total Company |
|||||||||||||||
Assets |
||||||||||||||||||||
Cash and short-term investments |
$ | 107 | $ | 4 | $ | 111 | $ | 62 | $ | 174 | ||||||||||
Cash and short-term investments pledged or restricted |
141 | 5 | 146 | 11 | 158 | |||||||||||||||
Financial instruments and other inventory positions: |
||||||||||||||||||||
Commercial Real Estate |
4 | | 4 | 0 | 4 | |||||||||||||||
Residential Real Estate and Other |
7 | | 7 | 0 | 7 | |||||||||||||||
Principal investments |
6 | | 6 | 20 | 25 | |||||||||||||||
Derivative Receivables and Related Assets |
| 7 | 7 | | 7 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total Financial instruments and other inventory positions |
16 | 7 | 23 | 20 | 43 | |||||||||||||||
Receivables from Debtors and LBHI-Controlled Entities and other assets |
79 | 0 | 79 | 74 | 153 | |||||||||||||||
Investments in Affiliates |
(30,163 | ) | | (30,163 | ) | (22,662 | ) | (52,825 | ) | |||||||||||
Due from Affiliates: |
||||||||||||||||||||
Debtors and LBHI- Controlled Entities |
18,955 | | 18,955 | 1 | 18,955 | |||||||||||||||
Non-Controlled Affiliates |
10,209 | (0 | ) | 10,209 | 784 | 10,994 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total Due from Affiliates |
29,164 | (0 | ) | 29,164 | 785 | 29,949 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total Assets |
$ | (655 | ) | $ | 17 | $ | (639 | ) | $ | (21,709 | ) | $ | (22,347 | ) | ||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Liabilities and Stockholders Equity |
||||||||||||||||||||
Liabilities |
||||||||||||||||||||
Payables to Debtors and LBHI-Controlled Entities and other liabilities |
$ | 90 | $ | 2 | $ | 92 | $ | 7 | $ | 99 | ||||||||||
Due to Affiliates: |
||||||||||||||||||||
LBHI-Controlled Entities |
$ | | | | 8,412 | 8,412 | ||||||||||||||
Non-Controlled Affiliates |
| | | 30 | 30 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total Due to Affiliates |
| | | 8,441 | 8,441 | |||||||||||||||
Taxes Payable |
29 | | 29 | 8 | 37 | |||||||||||||||
Liabilities Subject to Compromise |
131,421 | 22,677 | 154,098 | | 154,098 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total Liabilities |
131,541 | 22,679 | 154,219 | 8,456 | 162,675 | |||||||||||||||
Stockholders Equity |
(132,196 | ) | (22,662 | ) | (154,858 | ) | (30,164 | ) | (185,022 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total Liabilities and Stockholders Equity |
$ | (655 | ) | $ | 17 | $ | (638 | ) | $ | (21,709 | ) | $ | (22,347 | ) | ||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
See accompanying Notes to Balance Sheets |
Note: All values that are exactly zero are shown as . Values between zero and $500,000 appear as 0.
(1) | Balances for Debtors do not reflect the impact of eliminations of intercompany balances and investments in subsidiaries. |
(2) | Balances for LBHI-Controlled Entities reflect the impact of eliminations of (i) intercompany balances only between LBHI-Controlled Entities and (ii) investments in subsidiaries only between LBHI-Controlled Entities. |
Page 24 | ||||