The SIPA Liquidation of Lehman Brothers Inc.
James W. Giddens, Trustee


Home Page SIPA Trustee Public
Reports		 SIPA Claims
Process 		Customer
Claims
Litigation		 LBHI
Matters		 LBIE
Matters		 Barclays
Matters		 News
&
Information

Latest News Upcoming Court Hearings
April 20, 2012- Trustee’s Seventh Interim Report for the Period October 22, 2011 Through April 20, 2012

February 29, 2012- Statement Regarding UK Supreme Court Client Money Decision

February 28, 2012- Joint Announcement from LBI and LBHI Regarding an Agreement in Principle

January 13, 2012- The Trustee's Position Statement Regarding the Omnibus Customer Claim of Lehman Brothers International (Europe)

December 8, 2011- Memorandum Decision Confirming the Trustee’s Determination of Claims Relating to TBA Contracts

December 1, 2011- Second Motion for Order Approving the Trustee’s Allocation of Property

November 4, 2011- Update on Claims Brought on Behalf of Clients of Lehman Brothers International (Europe)

October 21, 2011- Trustee’s Sixth Interim Report for the Period April 23, 2011 Through October 21, 2011

General Information

This is the website for information pertaining to the U.S. Securities Investor Protection Act of 1970 (SIPA) liquidation of Lehman Brothers Inc. (LBI), the U.S. broker-dealer of Lehman Brothers. James W. Giddens was appointed Trustee for the liquidation, and Hughes Hubbard & Reed LLP was appointed as counsel to the Trustee.

On September 19, 2008, the Court entered an order granting the application of the Securities Investor Protection Corporation (SIPC) for issuance of a Protective Decree adjudicating that the customers of LBI are in need of protection afforded by the U.S. Securities Investor Protection Act of 1970 (SIPA). The liquidation has been referred to, and is now being administered under, the auspices of The Honorable James M. Peck, United States Bankruptcy Court for the Southern District of New York (Case No. 08-01420 (JMP) (SIPA). The liquidation of LBI is overseen by James W. Giddens, as the Trustee appointed by the United States District Court for the Southern District of New York. The Trustee fulfills public duties assigned under SIPA. The Main Case Docket can be accessed through the website maintained by the United States Bankruptcy Court (http://www.nysb.uscourts.gov). An unofficial version of the Docket is accessible by selecting the “Docket” link at the top of this page.

For more information on the Trustee's reform efforts, please click here.

The information on this website does not apply to any other Lehman entity, including separate insolvency proceedings involving Lehman Brothers Holdings, Inc. (LBHI) and Lehman Brothers International (Europe) (LBIE). For inquiries regarding those proceedings, please visit http://www.lehman-docket.com or http://www.pwc.co.uk, respectively.

Topical Information

General Creditor Claims Misdirected Wires Trustee's Investigation International Affiliates Adversary Proceedings Data and Transition Services Tax Matters Employee Benefits Executory Contracts Real Estate Insurance

Contact Us
PLEASE DIRECT LEGAL INQUIRIES TO:

Hughes Hubbard & Reed LLP
One Battery Park Plaza
New York, New York 10004
Phone: (212) 837-6000
Email: teamlehman@hugheshubbard.com
 PLEASE DIRECT MEDIA INQUIRIES TO:

Kent Jarrell
Phone: (202) 230-1833
Email: kjarrell@apcoworldwide.com

Jake Sargent
Phone: (202) 569-5086
Email: jsargent@apcoworldwide.com

Redirecting to Docket Information...

The liquidation of Lehman Brothers Inc. ("LBI") under the Securities Investor Act of 1970 ("SIPA") is the largest and most complex stock broker liquidation ever attempted, and one of the largest and most complex insolvency proceedings of any kind in history.

The Trustee for the liquidation of LBI fulfills a public duty assigned under SIPA. The Trustee's primary duty under the law is the return of customer property to customers of LBI as defined under SIPA, while at the same time maximizing the estate for all creditors.

Since his appointment on September 19, 2008 by the United States District Court for the Southern District of New York, the Trustee has administered more than $110 billion in the SIPA liquidation of LBI.

All of the Trustee's actions are in coordination with the advice of the Securities Investor Protection Corporation ("SIPC"). More information on SIPC is available at www.sipc.org. Please also refer to the SIPC Investor Guide and How SIPC Protects You.

Primary Duties


The Trustee for the liquidation of LBI fulfills a public duty assigned to him under SIPA.

  • The Trustee's principal duty is to return property to public customers of LBI and maximize assets available for return while being fair to the rights of other parties.
  • SIPA lays out a process for returning assets that requires fairness for all claimants. For more information, please refer to the SIPA Claims Process section of the website.

  • The Trustee has a duty to marshal assets to maximize the amount available for distribution as customer property and for the benefit of general creditors. The Trustee regularly reports to the U.S. Bankruptcy Court on progress in marshalling assets and resolving claims. Please refer to Public Reports section of the website for more information.
  • The Trustee has a duty to conduct an investigation concerning the acts, conduct, property, liabilities and financial condition of LBI, the operation of its business, and any other matter, to the extent relevant to the liquidation proceeding. The Trustee requests voluntary cooperation when possible, but also has subpoena power.
  • The Trustee's final report will provide a public and transparent record and lessons learned from the liquidation of LBI.
  • All of the Trustee's actions are in coordination with the advice of SIPC. All expenses incurred by the Trustee and counsel are fully reported to and approved by SIPC and the Court.

[Go To Top]

About the Trustee


On September 19, 2008, the United States District Court for the Southern District of New York entered an Order Commencing Liquidation granting the application of the Securities Investor Protection Corporation ("SIPC") for issuance of a Protective Decree adjudicating that the customers of Lehman Brothers Inc. ("LBI") are in need of the protection afforded by SIPA. James W. Giddens was appointed trustee for the liquidation, Hughes Hubbard & Reed LLP was appointed as counsel to the Trustee, and the case was removed to the United States Bankruptcy Court for the Southern District of New York.

The Trustee has retained various experts and professionals to perform various functions and otherwise assist the Trustee in the orderly liquidation of the LBI estate and satisfaction of customer claims.

Generally, in a SIPA liquidation a trustee assumes the premises of a broker-dealer. However, due to the acquisition of such premises by Barclays Capital Inc., the Trustee established a fully operational and staffed New York City office to facilitate review of claims and respond to inquiries to customer and creditors.

The Trustee makes every effort to keep customers and other interested parties informed on all ongoing efforts to administer the LBI estate. For contact information please email teamlehman@hugheshubbard.com.

[Go To Top]

Trustee's Activities


The activities of the Trustee for the SIPA liquidation of LBI are summarized in periodic Interim Reports to the Bankruptcy Court. Please refer to the Public Reports section of the website for more information.

Included among the Trustee's activities are the following matters:

  • SIPA Claims Process
  • Customer Claims Litigation
  • LBHI Matters
  • LBIE Matters
  • Barclays Matters (including the Account Transfers process)
  • General Creditor Claims
  • Misdirected Wires
  • Trustee's Investigation
  • International Affiliates
  • Adversary Proceedings
  • Data and Transition Services
  • Tax Matters
  • Employee Benefits
  • Executory Contracts
  • Real Estate
  • Insurance


    • Please click on any of the above to be directed to more information on those topics.

    [Go To Top]

    Reform Efforts


    A SIPA trustee has a duty under the law to investigate the reasons of the broker's failure and, as is traditional, to identify problems that could be remedied in future liquidations. In the case of LBI, these efforts include lessons learned, considerations, and recommendations for the Court, legislators, and regulators.

    In that connection, the Trustee made several recommendations for future broker-dealer liquidations in its Preliminary Investigation Report. In all phases of their efforts, the Trustee and his professionals work hand in hand with the Securities Investor Protection Corporation, meet regularly with the United States Securities & Exchange Commission, the Financial Industry Regulatory Authority, the Commodities Futures Trading Commission, and liaise with the Federal Reserve Bank of New York and the British Financial Services Authority.

    In addition to these ongoing efforts, the Trustee has also provided hundreds of thousands of pages of documents and information to several governmental entities involved in reform efforts, including the General Accounting Office, Financial Crisis Inquiry Commission, and the Congressional Oversight Panel.

    Finally, the Trustee is also a member of the SIPC Modernization Task Force, which is tasked with proposing appropriate statutory amendments to SIPA in light of changes in the securities industry and judicial interpretations of SIPA.

    [Go To Top]

    Trustee's Interim Reports to the Court


    In accordance with his duties under SIPA, the Trustee submits periodic Interim Reports to the Bankruptcy Court. Please click below to download these reports:


    [Go To Top]

    Trustee's Investigation Reports


    In accordance with his duties under SIPA, the Trustee must investigate the acts, conduct, property, and financial condition of LBI, including the causes of the broker-dealer's demise and lessons that may be learned from a regulatory perspective. Please click below to download the Trustee's Preliminary Investigation Report and Recommendations, which chronicles LBI's demise and includes practical lessons learned in the course of the liquidation and recommendations for the future. A final report, which among other things will comment on certain of the Trustee's litigations, will be issued at the conclusion of the liquidation.


    [Go To Top]

    Trustee's Presentations


    Presentations to the Bankruptcy Court



    Presentations to the Managed Funds Association



    Other Presentations



    [Go To Top]

    Protocol & Notices


    Case Management Orders



    Notices



    Protocols


    [Go To Top]

    The goal of the U.S. Securities Investor Protection Act of 1970 ("SIPA") is to transfer or return cash or property as promptly as possible to customers of a failed brokerage firm. SIPA lays out a process for returning assets that requires fairness for all claimants.

    The Trustee for the SIPA liquidation of Lehman Brothers Inc. ("LBI") continues to work through an enormous workload to resolve claims in a fair, transparent and orderly process. This involves analyzing claims against the estate, fairly resolving claim issues and vigorously marshalling assets to maximize the amount available for distribution as customer property.

    SIPA Liquidation Claims Process


    The goal of SIPA is to transfer or return cash or property as promptly as possible to customers of a failed brokerage firm. SIPA lays out a process for returning assets that requires fairness for all claimants.

    • SIPA provides that customers of a failed brokerage firm with no indebtedness to the broker receive all non-negotiable securities that are already registered in their names or in the process of being registered. All other so-called "street name" securities and customer cash are distributed on a pro rata basis.
    • All customer-related assets are put in a co-mingled fund of customer property. Allocation of property to the fund of customer property is based on a proposal by the Trustee subject to approval by the Bankruptcy Court.
    • Each verified claimant is entitled to a pro rata share of the fund of customer property based on the customer's respective "net equity" - the filing date value of a customer's non-customer name securities plus any cash balance owed the customer, less any indebtedness by the customer to the broker-dealer.
    • The Trustee must first determine the number of valid claimants and the amount and value of property (securities and cash) under the Trustee's control. Distributions to pay allowed customer claims will be made when there is clarity for reasonable estimates of both the amount of customer property available for distribution and the total net equity of all allowed customers claims. Distributions may be in stages.
    • Advances from the Securities Investor Protection Corp. (SIPC) reserve fund are available to satisfy the remaining claims of each customer up to a maximum of $500,000. This figure includes a maximum of $100,000 on claims for cash.

    [Go To Top]

    LBI Claims Process


    As of the June 1, 2009 bar date, the Trustee had received more than 12,500 asserted customer claims on behalf of more than 86,000 accounts, along with more than 7,500 general estate claims. The customer claims include those asserted by, among others, Lehman Brothers Holdings Inc. (LBHI), Lehman Brothers International (Europe) (LBIE), and Barclays Capital Inc. (Barclays) that were filed on an omnibus basis on behalf of many thousands of accounts.

    On October 5, 2009 the Trustee filed a Motion for Order Approving Trustee's Allocation of Property of the Estate pursuant to SIPA seeking Bankruptcy Court approval of an allocation of assets available to satisfy claims. The allocation motion will help determine how much of the property available to the estate (along with any future recoveries) will be apportioned to the fund of "customer property" - a priority pool of assets available only to allowed customer claims - and to the "general estate" - a pool of assets available to satisfy all other claims, including any potential deficiencies in customer claims. The Trustee's primary duty under the law is the return of customer property to customers of LBI as defined under SIPA, while at the same time maximizing the estate for all.

    On March 2, 2010, the court entered an Order approving the motion.


    [Go To Top]

    LBI Customer Claims


    The Trustee provided claimants with the option to file claims manually and electronically, a first in the history of SIPA liquidations. Pursuant to SIPA §78fff-2(a)(3), customer claims must have been received by January 30, 2009 to be eligible for maximum protection afforded under SIPA. No claim of any kind was allowed if not received by the Trustee on or before June 1, 2009.

    A claim is determined when a letter of determination has been sent to the claimant. As described in the Trustee's Third Interim Report, the Trustee has now responded to virtually all asserted customer claims and has made substantial progress in reconciling complex and sizeable omnibus claims.


    [Go To Top]

    General Creditor Claims


    The Trustee received over 7,500 general creditor claims, which will be reviewed separately after the customer claims process is complete and, in keeping with SIPA and §704(a)(5) of the Bankruptcy Code, at such time, the Trustee has reason to believe that there will be a meaningful distribution to general creditors.


    [Go To Top]

    Claims Registers


    The Trustee, by and through his Claims Agent, EPIQ Systems, maintains Customer and General Creditor Claims Registers (the “Registers”). Parties-in-interest may obtain online access to review both Registers and filed-claim forms by contacting EPIQ Systems at (646) 282-2500. Parties should take notice of the disclaimers accompanying both Registers and the notes associated with the Customer Claims Register. In addition, parties should take notice that certain claims on the Customer Claims Register remain on that Register (rather than the General Creditor Claims Register) though the Customer Claims have been reclassified to General Creditor Claim status, subject to further determination by the Trustee in the General Creditor Claims process.


    [Go To Top]

    Distributions


    The Trustee will proceed with distributions on allowed customer claims after all claims have been determined and there is sufficient clarity on or resolution of major contingencies and other issues. Distributions may occur in stages depending on the extent of allowed claims and available assets.

    Pursuant to SIPA §78fff-3(a), the Trustee has and may continue to request form SIPC advances of funds to satisfy claims below SIPA coverage limits ($500,000 with respect to securities and $100,000 with respect to cash, up to an overall total of $500,000). Pursuant to SIPA §78fff(2)(d), the Trustee may use such SIPC advances to purchase missing securities necessary to deliver to customers in satisfaction of their claims.

    See also, Statement Regarding Determination of Customer Claims and Distributions: July 1, 2009

    [Go To Top]

    Objections


    If a claimant disagrees with the Trustee's determination, the claimant may object and request a hearing before the Bankruptcy Court within thirty days of the date of the letter of determination. If a claimant fails to request a hearing within the thirty days, or if the claimant fails to appear at the scheduled hearing, then the Trustee's determination shall be final and the claim is closed.

    Any claimant who requests a hearing will have an opportunity to have its dispute adjudicated by the Court.


    [Go To Top]

    Claims Trading


    Both customer and creditor claims may be transferred in the LBI SIPA liquidation proceeding. To receive notices and distributions with respect to a transferred claim, notice of a claim transfer (if any is required to be filed with the bankruptcy court) must be provided in accordance with Bankruptcy Rule 3001(e).

    The Trustee neither encourages nor discourages claims trading. Potential transferors and transferees of claims should make their own independent evaluation of whether to enter into a claims trade based upon the public record in this case. The Trustee notes that a properly transferred claim merely provides the transferee with the right to pursue distributions on account of such claim. It is not a determination of the validity, amount or priority of such claim, nor of any claim or defense that the Trustee may have with respect to that claim or as against the transferor or transferee of such claim.


    [Go To Top]

    Upcoming Claims Litigation Hearings


    August 9, 2011- LBI State of the Estate and Hearing

    [Go To Top]

    Resolved Customer Claims Matters


    Miscellaneous Objections


    • The Trustee denied customer status to hundreds of claims for various reasons including because the claim was (1) not based on a relationship with LBI, (2) based on an account that was empty as of the filing date, or (3) based on an account that transferred pursuant to the Court's December 14, 2009 Order Approving the Account Transfers. The Bankruptcy Court has upheld the following motions regarding such claims:

      • Order signed on 8/19/2010 upholding determinations as to claims (i) based on no relationship with LBI, (ii) for accounts empty as of the Filing Date, and (iii) for accounts previously transferred in accordance with SIPA and the Account Transfer Order and expunging related objections thereto.

      • Order signed on 12/9/2010 upholding determinations as to claims (i) based on employee compensation; (ii) based on investments in funds that are not held at LBI; and (iii) based on relationships with entities other than LBI and expunging related objections thereto.

    MainStay Motion


    • On August 27, 2010, MainStay High Yield Opportunities Fund (“MainStay”) filed a motion for an order for relief from the automatic stay to access certain property of the LBI estate held at a third party bank. After a hearing on the motion, on February 16, 2011, MainStay entered into, and the Bankruptcy approved, a stipulation with the Trustee withdrawing its motion without prejudice.


    Fraud/Misrepresentation/Market Loss/Hedging


    • On July 28, 2010, the Trustee filed a motion to uphold his determination of certain claims denying customer status to claims arising from alleged fraud, misrepresentation and failed trades. The Trustee had denied each claim customer status and reclassified it as a general creditor claim. The parties objected, prompting the Trustee's motion. On November 3, 2010, the Bankruptcy Court signed an order upholding the Trustee's determinations and expunging the related objections thereto.


    Foreign Currency Transactions (FX)


    • On July 19, 2010, the Trustee filed a motion to uphold his determination of four claims for termination damages of open foreign currency forward transactions allegedly due from LBI to the claimants pursuant to International Swaps and Derivatives Association (“ISDA”) Master Agreements which governed the transactions. The Trustee had denied each claim customer status and reclassified it as a general creditor claim. The parties objected, prompting the Trustee's motion. Prior to the hearing scheduled for August 19, 2010, each of the claimants entered into stipulations with the Trustee withdrawing their objections.


    Shorts Valuation Date


    • On December 1, 2009, the Trustee filed a motion to uphold his determination regarding the claim of Fifth Third Structured Large Cap Plus Fund. At issue was the proper date to value short positions in Fifth Third's customer account. The Trustee argued that, pursuant to SIPA's net equity definition, short positions must be valued as of the Filing Date like all other credits and debits in a customer's account. On June 1, 2010, the Bankruptcy Court issued a memorandum decision granting the Trustee's motion. The Court held that the filing date is an “immutable element of every case under SIPA” and that “nothing in the safe harbor provisions of the Bankruptcy Code is inconsistent with that central liquidation premise.” The Court also held that the property in question was “customer property” under SIPA and thus subject to the SIPA claims process. On June 28, 2010, Fifth Third filed a Notice of Appeal. Such appeal has since been withdrawn and the June 1, 2010 is final and un-appealable.


    • On March 9, 2011, the Trustee moved for an Order Upholding the Trustee's Determinations With Respect to Certain Claims Based on Short Positions Held in Prime Brokerage Accounts at LBI. The Trustee argued that in accordance with the Court's decision in Fifth Third, the proper valuation date of a customer's net equity is the Filing Date. On March 31, 2011, the Court entered an Order granting the Trustee' Motion and noted in the hearing on the same day that the Court's Fifth Third Decision was now “the law of the case.”


    [Go To Top]

    Ongoing Customer Claims Litigation Matters


    TBAs and Other Forward Transactions


    On June 24, 2011, the Trustee moved for an order confirming the Trustee's determination of claims related to TBA Contracts. The matter is scheduled to be heard on August 9, 2011.

    Below, please find the following documents related to the Trustee's Motion:

    • TBA Contracts Motion

    • Affidavit of Daniel T. McIsaac in support of the Motion

    • Affidavit of William Burke in support of the Motion

    • Affidavit of Tracy Smith in support of the Motion

    • Declaration of Anson B. Frelinghuysen in support of the Motion

    • Notice of Extension of Briefing Schedule and of Status Conference in Lieu of Hearing on Trustee's Motion for an Order Confirming the Trustee's Determination of Claims Related to TBA Contracts


    Repurchase Transactions


    • The Trustee has denied customer treatment to claims arising out of repurchase (“repo”) agreements entered into with LBI, which represent financing arrangements rather than customer securities transactions. The Trustee is continuing to analyze these claims and prepare for potential litigation.

    • Stipulation and Order Signed on 7/13/2011 Regarding Discovery in Connection with Objections to the Trustee's Determinations of Claims Arising Out of Repurchase and Reverse Repurchase Transactions


    [Go To Top]

    Claims Received From LBHI and the Chapter 11 Debtors


    The Chapter 11 Debtors and their subsidiaries filed 632 claims against LBI on behalf of themselves and their customers or counterparties with a total estimated value of approximately $19.9 billion. The Trustee has been analyzing these claims and has sent letters of determination with respect to the Chapter 11 Debtors' claims. Where appropriate, and after extended discussions with the Chapter 11 Debtors to obtain the missing information, the Trustee sent deficiency letters indicating additional information that the Chapter 11 Debtors need to supply in support of some of their claims.

    The Trustee has allowed four customer claims of the Chapter 11 Debtors, for approximately $523 million. The Trustee issued letters of determination related to claims subordinated to all other creditors in excess of $11 billion of the Chapter 11 Debtors because claims are subject to subordination agreements. The remaining customer claims submitted by the Chapter 11 Debtors have been reclassified as general creditor claims, determined to be deficient, have negative net equity, or were denied for other reasons. The Trustee may have other defenses or reasons to subordinate or reduce, by setoff or otherwise, some claims by the Chapter 11 Debtors.

    Since receipt of the Trustee's determination letters, the Chapter 11 Debtors have recently confirmed that approximately $11 billion of such claims are subject to contractual subordination. Subordinated claims are not entitled to customer status. SIPA defines “customer” to exclude “any person to the extent that such person has a claim for cash or securities which by contract, agreement, or understanding, or by operation of law, is part of the capital of the debtor, or is subordinated to the claims of any or all creditors of the debtor, notwithstanding that some ground exists for declaring such contract, agreement, or understanding void or voidable in a suit between the claimant and the debtor.” § 78lll(2)(B).

    For the approximately $8 billion of claims potentially still pending, the Trustee and the Chapter 11 Debtors are discussing a process for prioritizing answers to factual questions and resolution of issues, beginning with some of the larger claims. At the request of the Chapter 11 Debtors, the Trustee has agreed to extend the Chapter 11 Debtors' time to respond to the letters of determination to and including September 30, 2011, without prejudice to further requests for extensions of time.


    [Go To Top]

    Claims Against LBHI and the Chapter 11 Debtors


    Pursuant to the Stipulation, Agreement and Order Between the Debtors and the Signatories to the Cross-Border Insolvency Protocol with Respect to the Bar Date Order approved by the Bankruptcy Court on August 25, 2009, the deadline for the Trustee to assert LBI's claims against the Chapter 11 Debtors was

    November 2, 2009. The Trustee, with the agreement of the Chapter 11 Debtors, is in the process of amending his claim. The Trustee has been involved in extensive discussions with the Chapter 11 Debtors to reconcile his claims and anticipates that process will be completed in the coming months.


    [Go To Top]

    PIK Notes Received From Lehman ALI Inc.


    On September 19, 2008, in the hours before the commencement of the SIPA proceeding, LBI, while still under the control of LBHI, transferred stock of 25 entities (some of which, in turn, had multiple subsidiaries) to Lehman ALI Inc. in exchange for a payment-in-kind note (“PIK Note”). Under the terms of the PIK Note, its value is to be the “fair market value of the Acquired Stock as of” September 19, 2008.

    The Trustee and the Chapter 11 Debtors have continued their dialogue as to the appropriate methodology for determining the value of the PIK Note. As part of this effort, the Trustee has requested, and received, financial information about the transferred PIK Note entities. Additional information will be required for the Trustee to complete his analysis, and the Chapter 11 Debtors have been working to provide that information.

    In addition, concurrent with the transfer of the PIK Note, LBI, while still under the control of LBHI, transferred certain intellectual property (patents and trademarks) to Lehman ALI, Inc. in exchange for a payment-in-kind note with a value to be determined at a later date (the “IP PIK Note”). The Chapter 11 Debtors recently informed LBI that, rather than attempt to determine the value of the IP PIK Note, they may instead return the intellectual property. The Trustee is presently evaluating this proposal.

    [Go To Top]

    LBIE, based in London, was the principal European broker-dealer within Lehman. Prior to the commencement of the liquidation, LBI dealt extensively with LBIE. As a result of the insolvency of LBIE, in September 2008, certain partners of PricewaterhouseCoopers ("PWC") were appointed as the LBIE Administrators. The Trustee and his professional advisors have continued to work extensively with the LBIE Administrators and their professional advisors in developing and sharing information about LBI and LBIE relevant to the administration of the respective estates and in determining claims that each of LBI and LBIE has against the other.


    Claims Received From LBIE


    On January 30, 2009, LBIE filed an omnibus customer claim on behalf of approximately 1,100 LBIE clients (the “LBIE Omnibus Customer Claim”) and a claim on its own behalf (the “LBIE House Claim”), both of which were subsequently amended by LBIE on May 29, 2009. The LBIE Omnibus Customer Claim included a securities related cash balance of up to approximately $4.5 billion; a securities balance of approximately $6.3 billion; and a commodities futures balance of approximately $1.3 billion. The LBIE House Claim included a securities-related cash balance of approximately $5.6 billion; a securities balance of approximately $2.2 billion; and a securities financing related balance of $2.3 billion. In addition, LBIE asserted a failed trades claim with respect to over 100,000 “failed to deliver to LBI” trades and over 95,000 “failed to receive from LBI” trades (the “LBIE Failed Trades Claim”).

    On September 10, 2010, LBIE sent to the Trustee purported second amendments to the LBIE Omnibus Customer Claim and the LBIE House Claim. The Trustee is reviewing these purported amendments to determine whether they are valid amendments. On September 16, 2010, the Trustee issued letters of determination with respect to the LBIE Omnibus Customer Claim, the LBIE House Claim and the LBIE Failed Trades Claim.

    With respect to the LBIE Omnibus Customer Claim and the LBIE Failed Trades Claim as it related to accounts covered by the LBIE Omnibus Customer Claim, the Trustee allowed the claim with respect to a specified list of securities valued at approximately $6.2 billion. This claim was allowed as a customer claim, subject to the Trustee's review of additional information regarding the LBIE clients on whose behalf the LBIE Omnibus Customer Claim was made. In addition, this allowed claim is subject to reduction for certain indebtedness owed to LBI. The determination of the claim for cash covered by the LBIE Omnibus Customer Claim was deferred because LBIE had not provided the Trustee with adequate information regarding such claim. The Trustee has requested additional information from LBIE to enable the Trustee to determine this claim. The claim for the commodities futures balance included in the LBIE Omnibus Customer Claim was denied because the relevant accounts had been transferred to Barclays.

    With respect to the LBIE House Claim, the Trustee denied the claim for cash of approximately $2.3 billion. Substantially all of the balance of the LBIE House Claim and the LBIE Failed Trades Claim as it related to accounts covered by the LBIE House Claim was denied as a customer claim and reclassified as a general unsecured claim.

    As with the Chapter 11 Debtors, the Trustee's professionals and counsel continue to work closely with the LBIE Administrators and LBIE's professionals at PWC and counsel to address their questions regarding the Trustee's determinations of the LBIE claims. The Trustee has extended the time for LBIE to file responses to his determinations until June 30, 2011, without prejudice to requests for further extensions of time.

    The Trustee, in coordination with SIPC, has drafted and discussed with the LBIE Administrators a possible protocol regarding the treatment of allowed claims of LBIE clients covered by the LBIE Omnibus Customer Claim and subsequent distribution of property. The issue is complex because of differences between English and U.S. laws. The Trustee contemplates seeking Bankruptcy Court approval of any such protocol. If a formal protocol cannot be adopted in a reasonable timeframe, the Trustee will proceed to seek information and cooperation from LBIE to assure correct treatment of individual claimants.

    [Go To Top]

    LBI Claims Against LBIE


    On December 15, 2009, the High Court of Justice of England and Wales (the ”High Court”) established, at the request of the LBIE Administrators, a bar date of March 19, 2010, for the assertion of claims related to “Trust Assets” held by LBIE. “Trust Assets” consist generally of securities held by or on behalf of LBIE in segregated client accounts and certain related cash. LBIE extended the bar date for LBI to April 9, 2010. The bar date does not apply to general unsecured claims against LBIE, claims arising only from security interests in Trust Assets, or claims to monies held by LBIE pursuant to certain English regulations.

    On June 30, 2009, the Trustee filed two securities-related claims against LBIE: one on behalf of LBI customers and the other a proprietary claim on behalf of LBI. The claim on behalf of LBI customers related to 160 security positions with a filing date claim value of $439 million and cash balances of $259.5 million. The Trustee amended that claim on April 9, 2010, to include an additional three security positions with a filing date value of $0.2 million and additional cash held on behalf of certain LBI prime broker customers in the aggregate amount of $461.9 million. In addition, the amendment revised the foreign exchange rates used to calculate the U.S. dollar value of the cash originally claimed by the Trustee, resulting in an increase from $259.5 million to $410.4 million. LBIE has taken the position that certain of the customers on whose behalf the Trustee filed such claim were actually LBIE customers entitled to distribution of such assets by LBIE. LBIE and the Trustee are currently engaged in discussions and exchanges of information seeking to resolve this issue.

    LBI's proprietary claim against LBIE related to 860 security positions with a filing date claim value of $2.4 billion and cash balances of $1.2 billion. LBI expects to file additional claims against LBIE not related to “Trust Assets” in the future. Previously, the High Court has granted the Trustee's application for recognition of the SIPA liquidation of LBI as a foreign main proceeding, and in that regard the Trustee has been granted discovery rights.

    [Go To Top]

    English Court Proceedings


    Client Money Judgment


    The LBIE Administrators made an application to the High Court seeking directions concerning LBIE's obligations under applicable English regulations in relation to the handling of client money by LBIE prior to the time of administration, and judgment on this application was handed down on December 15, 2009. LBI and certain other client money claimants of LBIE appealed such decision to the Court of Appeal, and judgment on the appeals was handed down on August 2, 2010. The Court of Appeal overturned the High Court's judgment on two issues:

    First, the Court of Appeal held that the English client money rules require identifiable client money held by LBIE (at the time of administration) outside its segregated accounts to be pooled with the client money held in its segregated accounts. The lower court's judgment had held that (a) the pool was comprised only of the client money in LBIE's segregated accounts, and (b) that identifiable client money held outside such accounts should be returned to the specific clients for whom it was held.

    Second, the Court of Appeal held that all clients who ought to have had money segregated for them by LBIE as client money prior to administration are entitled to share in the client money pool, regardless of whether or not LBIE did in fact segregate money claimants were entitled to claim against the pool. The Court of Appeal upheld the lower court's judgment that the statutory trust which attaches to client money attaches at the point of receipt by LBIE, not the point of segregation, and that money which was due and payable by LBIE to a client but in respect of which no money had been specifically appropriated for that client prior to LBIE's administration is not client money. The Trustee has a claim against LBIE for a substantial amount of client money.

    The LBIE Administrators, the Trustee and another client money claimant of LBIE have sought permission of the Supreme Court to appeal the Court of Appeal's judgment to such court. Permission to appeal has been granted to the other client money claimant and the Trustee and the administrators do not have permission to appeal.

    One of the other client money claimants, which was adversely affected by the Court of Appeal decision, has been granted permission to appeal to the Supreme Court. The appeal is due to be heard in the week commencing October 31, 2011.

    RASCALS


    Substantive trial of the RASCALS "(Regulation and Administration of Safe Custody and Local Settlement)" application began in the High Court on October 11, 2010. The application, which was commenced by the Administrators of LBIE in 2009, seeks the High Court's ruling as to the ownership of securities in LBIE's depots which were purchased by LBIE for the trading books of other Lehman affiliates, including LBI.

    On November 19, 2010, the U.K High Court issued a decision on this matter.

    The liquidators of Lehman Brothers Finance SA, Lehman Brothers Commercial Corporation Asia Limited and Lehman Brothers Asia Holdings Limited filed appellants' notices in respect of the High Court's judgment on January 14, 2011 and the LBIE Administrators filed a cross-appeal on January 28, 2011. The Trustee has not filed a respondent's notice.

    [Go To Top]
    NOTE: THE SALE TO BARCLAYS CLOSED ON SEPTEMBER 22, 2008

    Sale To Barclays


    On September 20, 2008, the Court entered an Order Under 11 U.S.C. §§ 105(a), 363, and 365 and Federal Rules of Bankruptcy Procedure 2002, 6004 and 6006 Authorizing and Approving (A) The Sale of Purchased Assets Free and Clear of Liens and Other Interests and (B) Assumption and Assignment of Executory Contracts and Unexpired Leases (the "Sale Order"). Click on the links below to see the various documents associated with the sale.

    Executed Sale Documents



    Sale Motion/Order Documents


    • To see a complete copy of the Sale Motion, dated September 17, 2008, please click here.
    • To see a complete copy of the Sale Order, dated September 19, 2008, entered in the SIPA proceeding, please click here.
    • To see a complete copy of the Sale Order, dated September 20, 2008, please click here.

    [Go To Top]

    Trustee's Motion Regarding Sale to Barclays


    On September 15, 2009, the Trustee filed a Motion for Relief Pursuant to the Sale Orders or, Alternatively, for Certain Limited Relief (the "Trustee's Motion"), requesting that the Court enforce the Sale Orders and uphold the Trustee's contractual right to three categories of disputed assets that Barclays claimed it had obtained in the sale or, alternatively, that the Court grant the Trustee relief from the Sale Orders under Rule 60(b). LBHI and the Creditors' Committee also filed Rule 60(b) Motions.

    On February 22, 2011, Judge Peck issued a decision on the Motions.

    Click on the links below to see the various documents associated with the Trustee's Motion.

    Trustee's Motion Documents



    [Go To Top]

    Adversary Proceedings Related To Barclays Matters


    The relief sought in the Rule 60(b) Motions filed by the Trustee and the LBHI Debtors are now being pursued in separate Adversary Proceedings.

    • To see a copy of the Complaint in the Adversary Proceeding addressing the relief sought in the Trustee's Rule 60(b) Motion, please click here.
    • To see a copy of the Complaint in the Adversary Proceeding addressing the relief sought in the LBHI Debtors' Rule 60(b) Motion, please click here.

    [Go To Top]

    Customer Account Transfer Process


    • Pursuant to SIPA and the Court order commencing the liquidation of LBI, the Trustee effectuated transfers of three sets of customer accounts: (i) Private Asset Management ("PAM") accounts; (ii) Private Investment Management ("PIM") accounts; and prime brokerage ("PB") accounts (together, the "Account Transfers").

    • The Account Transfers involved transferring over 110,000 customer accounts representing over $92 billion in account value so that customers could access their property and continue trading through Neuberger Berman, Barclays Capital Inc. and other Securities Investor Protection Corporation ("SIPC") member broker-dealers. These transfers protected thousands of customers from disruption and delay, preserved billions of dollars in value and eased market tensions in exceptionally uncertain times.

    • On December 10, 2009, the U.S. Bankruptcy Court approved the final remaining transfer of PIM assets to former LBI customers. This milestone brought to a successful conclusion the Account Transfer phase of the SIPA liquidation of LBI. The U.S. Securities and Exchange Commission ("SEC") and the Federal Reserve Bank of New York all supported the Trustee's motion and the account transfer process, and with this ruling their and the Trustee's goal of customer protection has in fact been achieved. The Trustee obtained permission of the Court to implement the Account Transfers for the benefit of customers by order dated December 14, 2009.

    [Go To Top]

    Trustee's Statements

    • Open Letter To Prime Brokerage Customers and Other Interested Parties: December 1, 2008

    • Statement Regarding the October 14, 2008 Prime Brokerage Protocol: January 23, 2009
    • Statement Regarding Determination of Customer Claims and Distributions: July 1, 2009
    • Statement on Lehman Brothers Holding Inc. Decision on Retiree Health and Medical Benefits: October 19, 2009
    • Statement Regarding Trustee's Complaint against Barclays and Barclays' Opposition Memorandum: January 29, 2010
    • Statement Regarding Trustee's Complaint against Barclays and Barclays Opposition Memorandum: March 18, 2010
    • Statement Regarding Testimony Supporting Trustee's Position and Demonstrating Weakness of Barclays' Claims: May 7, 2010
    • FAQ on the State of the Estate: September 8, 2011
    • Joint Announcement from LBI and LBHI Regarding an Agreement in Principle: February 28, 2012
    • Statement Regarding UK Supreme Court Client Money Decision: February 29, 2012

    [Go To Top]

    SIPC Releases

    • SIPC Press Release Regarding Phony “Look-Alike” Web Site Targeting Madoff Victims: March 9, 2010

    [Go To Top]

    News Releases

    • News Release: James W. Giddens, Lehman Brothers Inc. SIPC Trustee, Reports on Progress of U.S. Liquidation: September 26, 2008
    • News Release: James W. Giddens, Lehman Brothers Inc, SIPC Trustee, Reports on Progress of Customer Claim Processing: February 25, 2009
    • News Release Preliminary Investigation Report: August 25, 2010
    • News Release Lehman Brothers Trustee and JPMorgan Reach Agreement on Return of More than $800 Million in Customer Assets for Distribution to Customer Claimants: April 21, 2011

    [Go To Top]

    Court Opinions

    • Order Denying Motion Of DCI Umbrella Fund PLC, Case No. 08-CV-8119 (S.D.N.Y. April 26, 2010)
    • Memorandum Decision Granting Motion to Uphold Determination Of Claim By SIPA Trustee, Case No. 08-1420 (Bankr. S.D.N.Y. June 1, 2010) (Fifth Third Decision)
    • Opinion On Rule 60(b) Motions Issued, Case No. 08-1420 (Bankr. S.D.N.Y. February 22, 2011)
    • Memorandum Decision granting motions to dismiss issued in Evergreen Solar Inc. v . Barclays PLC Case No. 08-1633 (Bankr. S.D.N.Y. February 22, 2011)
    • Memorandum Decision Enforcing the Automatic Stay and Compelling Payment by UBS AG, Case No. 08-1420 (Bankr. S.D.N.Y. October 4, 2011) NEW

    [Go To Top]

    Forms

    *** Note: The time to file a claim in LBI's SIPA Proceeding has passed. The below forms are for informational purposes only ***


    [Go To Top]

    On August 9, 2011, the Trustee for Lehman Brothers Inc. (“LBI”) and his representatives presented a State of the Estate update before Judge James M. Peck of the United States Bankruptcy Court for the Southern District of New York.

    On August 10, 2011, in New York City, and on August 12, 2011, in London, the Trustee and/or his representatives presented the State of the Estate to creditors and other interested parties. The New York presentation was sponsored by the Managed Funds Association, and the London presentation was sponsored by the Alternative Investment Management Association.

    The State of the Estate summarizes the efforts of the Trustee to resolve claims in a fair, transparent and orderly process and vigorously marshal assets to maximize the amount available for distribution as customer property. Below are answers to some representative questions asked by attendees of the presentations.

    How Much Property Is In The LBI Estate?


    There is approximately $25 billion in cash and securities presently under the Trustee’s control, which is reduced to $20.6 billion when factoring in certain reserves ($3 billion related to Barclays litigation and $1.3 related to post-petition dividends and interest).

    This is the total amount of property in the LBI estate. This amount will be allocated between the fund of customer property and the general estate. Claims against the LBI estate exceed the current total value of the estate: $12.2 billion in allowed customer claims, and approximately $100 billion of unresolved customer claims and asserted general creditor claims. The estate may be augmented by further recoveries and settlements by at best a few billion dollars.

    What Is Allocation And Why Does The Trustee Need To Do It?


    In a liquidation under the Securities Investor Protection Act (“SIPA”), the Trustee allocates estate property between a fund of customer property and a general estate. The fund of customer property is used to satisfy customer claims. A separate general estate is used to satisfy general creditor claims and other expenses in accordance with the priorities of the Bankruptcy Code. If there is any shortfall in the satisfaction of customer claims (i.e. if customers receive less than 100 cents on the dollar), then that shortfall becomes a general unsecured claim against the general estate as well.

    U.S. customer protection rules require a broker-dealer to segregate, or set aside, customer property from other property and maintain reserves for the exclusive benefit of customers. The SIPA liquidation process mirrors the customer protection intent of these rules: where a broker-dealer has failed to set aside customer property, property may be transferred from other sources to the fund of customer property to compensate for such compliance shortfalls. In 2010, the Court sustained the Trustee’s authority to compensate customers for compliance shortfalls in this case. See Order.

    The Trustee intends to file a proposed allocation to the Court on motion with notice to and the opportunity to be heard by all interested parties in the next few months. The allocation, relying on the principles set forth in the Court’s 2010 Order, will specify the property the Trustee proposes to allocate to the fund of customer property and the general estate. The Court will determine the appropriate allocation based on the Trustee’s motion and responsive submissions.

    When Will Distributions Begin On Allowed Customer Claims?


    The Trustee will make distributions on allowed customer claims when major claims determination issues are resolved, the fund of customer property is established, and there is sufficient clarity on, or resolution of, at least several of the major contingencies. Distributions may occur in stages depending on the value of all allowed claims, available assets, and resolution of contingencies. The Trustee continues to study the feasibility of an interim distribution, which is complicated by the significant cost and complexity of implementing a distribution.

    What Assets Are Expected To Be In The General Estate?


    The size of the general estate will be determined by an allocation proposal that must be presented to and approved by the Court. While the precise size of the general estate has not yet been established, it is clear that LBI’s apparent capital base had disappeared by September 19, 2008, that significant property was held in segregation for customers, and that total claims to the general estate exceed all amounts under the Trustee’s control, let alone those that will be available for general creditors. As a result, even assuming some additional recoveries and significant reductions in allowable claim amounts, a major shortfall in the general estate is inevitable.

    When Will Post-Petition Dividends And Interest Be Distributed And In What Form Will The Distributions Be In?


    As of June 30, 2011, the Trustee has received approximately $1.3 billion of dividends and interest received after September 19, 2008 on both customer and proprietary assets. These post-petition amounts are accounted for separately from other estate property. SIPA does not specify how a trustee is to treat post-petition interest and dividends attributable to customer property. The Trustee believes that these amounts should be returned to customers, and intends to present a motion requesting that the Court approve a method of determining and distributing dividends and interest once the universe of allowed claims is known and the fund of customer property has been established. The motion will be on notice to all parties in the case.

    The distribution of post-petition dividends and interest will most likely occur after or in conjunction with distributions from the fund of customer property, but prior to distributions to general unsecured creditors.

    How Does The Trustee Treat Corporate Actions?


    The Trustee’s professionals monitor redemptions, tender offers, and other corporate events affecting securities under the Trustee’s control as part of the ongoing administration of the LBI estate. All decisions with regard to participation in corporate actions are determined pursuant to the Trustee’s business judgment regarding the interests of the LBI estate.

    What Is The Process For Resolving Duplicate LBIE/LBI Claims?


    The Trustee is presently working with Lehman Brothers International (Europe) (“LBIE”) Administrators to identify and reconcile duplicate claims submitted by LBIE customers in the LBIE and LBI proceedings. In addition, the Trustee has begun the process of comparing the allowed LBIE omnibus claim to the SIPA claims of LBIE customers. This is a time consuming and exhaustive process that involves a cusip-by-cusip comparison per customer. In some cases, LBIE customers held non-U.S. securities, which were not held in the omnibus account at LBI. Securities that LBIE rehypothecated would similarly not be held in the omnibus account at LBI. Nevertheless, the Trustee expects to resolve many LBIE customers’ objections through the allowed LBIE omnibus customer claim. Some objections, however, may have to be litigated.

    What Are The Major Remaining Contingencies?


    LBIE submitted a $13.9 billion proprietary (“house”) claim. In September 2010, the Trustee determined that this was not a customer claim. LBIE objected to the Trustee’s determination as it relates to approximately $8.9 billion of its house claim. The parties have entered a Joint Scheduling Order for judicial determination of the dispute.

    LBIE also filed a $16.4 billion omnibus customer claim on behalf of its underlying customers. The Trustee allowed this claim in the amount of approximately $8.3 billion. LBIE’s deadline to object to the portions that were denied or reclassified is October 31, 2011. Almost three hundred of LBIE’s underlying customers filed customer claims to the same property, which the Trustee denied as improper claims against LBI since the property was not held in LBI accounts but in LBIE accounts. The claims of LBIE customers that are duplicative in part of LBIE’s omnibus customer claim total approximately $13 billion. While the Trustee expects the amounts that are unresolved with respect to these customers to be reduced significantly as duplicative claims are resolved, he recognizes that there are likely to be some significant disputed amounts with respect to some claims that will likely have to be resolved through further discussions and litigation.

    Lehman Brothers Holdings Inc. (“LBHI”) and the other Chapter 11 Debtors asserted claims totaling $19.9 billion. The Trustee has allowed over $523 million and the Chapter 11 Debtors agree that $11.4 billion is subject to subordination. The remaining $8 billion potentially in dispute has been denied or reclassified by the Trustee. The Chapter 11 Debtors’ deadline to object is September 30, 2011.

    Other major contingencies include resolution of the Barclays appeal and the allocation motion described in the above.

    Does The Trustee Intend To Make Distributions On The LBIE Omnibus Claim To LBIE Or To The Underlying LBIE Customers?


    The Trustee prefers a cross-border approach that resolves the LBIE omnibus customer claim and also provides for distributions to underlying LBIE customers. The Trustee will require appropriate releases from customers and LBIE before property is released.


    Trustee's Interim Reports to the Court

    [Go To Top]

    Opinions

    • Memorandum Decision Granting Motion to Uphold Determination Of Claim By SIPA Trustee, Case No. 08-1420 (Bankr. S.D.N.Y. June 1, 2010)
    • Order Denying Motion Of DCI Umbrella Fund PLC, Case No. 08-CV-8119 (S.D.N.Y. Apr. 26, 2010)
    • Client Money Judgment   New update!
      • On August 2, 2010, the Court of Appeal in London issued a unanimous ruling that clients for which LBIE held client money are entitled to share in a client money pool even if LBIE did not segregate such client money for them. The court's decision, available here, overturns in part a December 2009 ruling by the High Court as well as a supplementary ruling issued in January 2010. The lower court had ruled that the pool of pre-administration segregated client money was to be distributed to only those clients for which LBIE had segregated client money prior to its administration in proportion to the amount segregated for them, and that LBIE had no obligation to correct the shortfall in the amount of client money held on a segregated basis. The Trustee, together with three other respondents, appealed the first instance client money judgment. The Court of Appeal (reversing the High Court decision), held that the Financial Services Authority's Client Assets Rules require that identifiable client money held by LBIE outside its segregated accounts must be pooled with client money held in its segregated accounts and distributed to all clients entitled to a claim against the pool.
      • The LBI Trustee has a claim against LBIE for a substantial amount of money that should have been segregated but was not. The Court of Appeal's judgment increases the protection of customers and customer property, and should lead to greater recovery for customers and others in the SIPA liquidation of LBI. It is not known yet whether the decision will be appealed to the U.K. Supreme Court.
    [Go To Top]

    News

    [Go To Top]

    Presentations

    [Go To Top]

    Protocols & Notices

    [Go To Top]

    Misdirected Funds


    [Go To Top]

    Claims Trading - Important Information   New update!


    Both customer and creditor claims may be transferred in the LBI SIPA liquidation proceeding. To receive notices and distributions with respect to a transferred claim, notice of a claim transfer (if any is required to be filed with the bankruptcy court) must be provided in accordance with Bankruptcy Rule 3001(e).

    The Trustee neither encourages nor discourages claims trading. Potential transferors and transferees of claims should make their own independent evaluation of whether to enter into a claims trade based upon the public record in this case. The Trustee notes that a properly transferred claim merely provides the transferee with the right to pursue distributions on account of such claim. It is not a determination of the validity, amount or priority of such claim, nor of any claim or defense that the Trustee may have with respect to that claim or as against the transferor or transferee of such claim.


    [Go To Top]

    Tax Update


    Form 1099 Information

    If you previously received Forms 1099 as a Lehman account holder to report items such as interest and dividends, please note that no reportable activity occurred during the 2009 calendar year. Therefore, 2009 Forms 1099 were not required to be issued. 2008 is the last year for which such Forms will be issued by Lehman to account holders. If for any reason you feel the information on your 2008 Form 1099 was incorrect, please contact your tax advisor. The 2008 Forms 1099 were prepared with information contained in Lehman's systems; therefore, revised forms will not be issued.

    Cost Basis Information

    We are unable to provide you with cost basis information relating to sales of securities that took place during the time you were a Lehman account holder. Please contact your investment advisor or refer to the monthly statements that were provided to you throughout the years to calculate the appropriate cost basis. We are unable to provide you with additional copies of monthly statements.

    Tax Advice

    We are unable to provide you with tax advice. Please contact your tax advisor.


    [Go To Top]

    Forms and Letters

    [Go To Top]

    The sale to Barclays closed on September 22, 2008

    On September 15, 2009, the Trustee filed a Motion for Relief Pursuant to the Sale Orders or, alternatively, for Certain Limited Relief Under Rule 60(b) (the "Trustee's Rule 60(b) Motion"). To see information regarding the Trustee's Rule 60(b) Motion, please click here.

    Trustee's Statement dated March 18, 2010.

    Trustee's Statement dated January 29, 2010

    [Go To Top]

    Executed Sale Documents

    [Go To Top]

    Sale Motion/Order

    On September 20, 2008, the Court entered an Order Under 11 U.S.C. §§ 105(a), 363, and 365 and Federal Rules of Bankruptcy Procedure 2002, 6004 and 6006 Authorizing and Approving (A) The Sale of Purchased Assets Free and Clear of Liens and Other Interests and (B) Assumption and Assignment of Executory Contracts and Unexpired Leases (the "Sale Order").

    To see a complete copy of the Sale Order, dated September 19, 2008, entered in the SIPA proceeding, please click here [Docket #3 in Lehman Brothers Inc. et al. Case No.: 08-1420].

    To see a complete copy of the Sale Order, dated September 20, 2008, please click here [Docket #258 in Lehman Brothers Holdings Inc. et al. Case No.: 08-13555].

    To see a complete copy of the Sale Motion, dated September 17, 2008, please click here [Docket #60 in Lehman Brothers Holdings Inc. et al. Case No.: 08-13555].

    [Go To Top]

    Rule 60(b) Motions Regarding Sale to Barclays

    To see a complete copy of the Trustee's Rule 60(b) Motion, please click here [Docket #1682 in Lehman Brothers Inc. et al. Case No.: 08-1420].

    To see a complete copy of the LBHI Debtors' Rule 60(b) Motion, please click here [Docket #5148 in Lehman Brothers Holdings Inc. et al. Case No.: 08-13555]. The relief sought in the Rule 60(b) Motions filed by the Trustee and the LBHI Debtors are now being pursued in separate Adversary Proceedings.

    To see a copy of the docket in the Adversary Proceeding addressing the relief sought in the Trustee's Rule 60(b) Motion, please click here.

    To see a copy of the docket in the Adversary Proceeding addressing the relief sought in the LBHI Debtors Rule 60(b) Motion, please click here.

    [Go To Top]

    Contracts and Leases to be Assumed and Assigned to Barclays

    The Purchaser had up to 60 days after the closing of the sale to designate executory contracts and unexpired leases for assumption and assignment. Certain contracts were designated for assumption and assignment as of the date of closing of the sale ("Closing Date Contracts"). In addition, the Purchaser designated additional contracts relating to the sale ("Designated Contracts") for assumption and assignment on a rolling basis. Further details on the Closing Date Contracts and Designated Contracts are provided below.

    [Go To Top]

    Closing Date Contracts

    To see the list of Contracts and Leases to be assumed and assigned to the Purchaser at the closing (the "Closing Date Contracts"), please click on the links below:

    The objection deadline for counterparties to Closing Date Contracts to object to Cure Amounts has passed.

    To see the Procedures for Resolving Objections to Cure Amounts on the Closing Date Contracts, please click here. (updated as of 9/24/2008 6:00 PM).
    List of IT Closing Date Contracts (updated as of 9/19/2008 1:07 AM *)
    List of Non-IT Closing Date Contracts (excluding Corporate Real Estate) (updated as of 9/18/2008 11:43 PM *)
    List of Corporate Real Estate Closing Date Contracts (updated as of 9/19/2008 1:07 AM *)

    [Go To Top]

    Designated Contracts

    The Purchaser filed Notices of Assumption and Assignment of Executory Contracts and Unexpired Leases as to Designated Contracts on the dates below. Copies of these notices may be viewed by clicking on the applicable date below.

    The deadline to file a written objection concerning any of these Designated Contracts has passed.

    To see the Order establishing procedures for resolving disputes concerning the Designated Contracts (including disputes over cure amounts), please click here [Docket #69].

    [Go To Top]

    Rejected Contracts

    As to executory contracts that were neither Closing Date Contracts nor Designated Contracts in connection with the sale to Barclays, the Trustee has been conducting a review of such contracts and has filed Notices of Rejection of Executory Contracts as to certain of such contracts on the dates below. Copies of these notices may be viewed by clicking on the applicable date below.

    The deadlines to file a written objection concerning any of the contracts identified in any of these Notices of Rejection of Executory Contracts has passed.

    [Go To Top]

    Continuing Review of Executory Contracts

    The Trustee is continuing to review the LBI estate's remaining executory contracts. The Trustee's deadline to assume or reject executory contracts has been extended to May 12, 2010 without prejudice to the Trustee's rights to seek further extensions. To see a copy of the order extending the deadline, please click here.

    [Go To Top]

    FOR INFORMATION ON THE SIPA LIQUIDATION OF LEHMAN BROTHERS INC. (LBI) PROCEEDING, PLEASE CONTACT:

    US: (866) 841-7868
    Non-US: (503) 597-7690

    First-Class Mail:
    Lehman Brothers Inc. Claims Processing Center
    c/o Epiq Bankruptcy Solutions, LLC
    P.O. Box 6389
    Portland, OR 97228-6389
    Overnight and Hand Deliveries:
    Lehman Brothers Inc. Claims Processing
    c/o Epiq Bankruptcy Solutions, LLC
    10300 SW Allen Blvd
    Beaverton, OR 97005

    [Go To Top]

    LEGAL INQUIRIES SHOULD BE DIRECTED TO:

    Hughes Hubbard & Reed LLP
    One Battery Park Plaza
    New York, NY 10004

    [Go To Top]

    MEDIA INQUIRIES SHOULD BE DIRECTED TO:

    Kent Jarrell
    Email: Kjarrell@apcoworldwide.com
    Phone: (202) 230-1833

    [Go To Top]

    FOR INFORMATION ON SIPC, PLEASE CONTACT:

    Securities Investor Protection Corporation
    805 15th Street, N.W. Suite 800
    Washington, D.C. 20005-2215
    Phone:(202) 371-8300
    Fax: (202) 371-6728
    Email: asksipc@sipc.org

    Information on SIPC is available at www.sipc.org or the SIPC Investor Guide and How SIPC Protects You.


    [Go To Top]

    TOPICAL INFORMATION


    Click below to see a summary of the following matters:
    For additional information, please refer to the Public Reports section of this site, available here.

    General Creditor Claims


    The Trustee has received over 7,500 general creditor claims, which will be reviewed separately after the customer claims process is complete and, in keeping with SIPA and §704(a)(5) of the Bankruptcy Code, at such time the Trustee has reason to believe that there will be a meaningful distribution to general creditors.

    The Trustee, by and through his Claims Agent, EPIQ Systems, maintains Customer and General Creditor Claims Registers (the “Registers”). Parties-in-interest may obtain online access to review both Registers and filed-claim forms by contacting EPIQ Systems at (646) 282-2500. Parties should take notice of the disclaimers accompanying both Registers and the notes associated with the Customer Claims Register. In addition, parties should take notice that certain claims on the Customer Claims Register remain on that Register (rather than the General Creditor Claims Register) though the Customer Claims have been reclassified to General Creditor Claim status, subject to further determination by the Trustee in the General Creditor Claims process.


    [Go To Top]

    Misdirected Wires


    The Trustee continues to receive and investigate requests for the return of funds misdirected into LBI bank accounts. The Trustee has returned more than $543 million in misdirected funds since the commencement of the liquidation. In April 2010, the Trustee implemented Court-authorized procedures to increase the efficiency and reduce the costs of administering the return process, including: (a) returning a substantial number of transfers of misdirected funds of $250,000 or less without the need of obtaining further court approval; (b) surcharging new misdirected funds claims a processing fee equal to one percent (1%) of the return amount up to a maximum surcharge of $5,000 per return; and (c) disallowing and expunging misdirected funds claims in which the party requesting a return fails to provide information or execute required documentation within sixty days of a final written notice by the Trustee requesting such information or documentation. The protocol for the return of misdirected wires and request form for same can be found below:


    The Trustee notes that wire transfers specifically intended for LBI should continue to be sent directly to accounts at LBI. He appreciates all parties' prompt attention to these matters.


    [Go To Top]

    Trustee's Investigation


    Ongoing Investigation


    • Under SIPA, the Trustee has the specific and important duty to conduct an investigation and prepare a report concerning “the acts, conduct, property, liabilities, and financial condition of [LBI], the operation of its business, and any other matter, to the extent relevant to the liquidation proceeding. . . .” In furtherance of this duty, the Trustee obtained authority from the Bankruptcy Court by Order dated January 15, 2009 to issue subpoenas in furtherance of this duty, and since then has been actively engaged in pursuing numerous avenues of investigation.
    • The investigation of potential causes of action and other matters affecting the assets and property of the debtor is continuing. With the active participation of SIPC, the Trustee has continued the approach of first pursuing voluntary cooperation, but resorting to invocation of his subpoena authority where necessary.

    Preliminary Report


    • Though investigation reports are often issued at or near the end of a SIPA liquidation, due to the magnitude of Lehman and the fact that many aspects of the recently enacted financial reform legislation were developing concurrently, the Trustee viewed a preliminary report less than two years into the liquidation as appropriate. The Trustee's Preliminary Investigation Report, completed and issued on August 25, 2010, addressed the broad topics of: (i) the causes of LBI's demise and the events and transactions that preceded it; (ii) challenges that have arisen in the largest broker-dealer liquidation in history; (iii) lessons learned from the LBI liquidation; and (iv) legislative, regulatory, and other policy recommendations for the future.
    • The Preliminary Report concluded that, at least until relatively late in the day when confusion set in, LBI's compliance with regulatory requirements largely had the effect they were supposed to have. LBI generally complied with applicable regulations at the U.S. broker-dealer level, and the regulators and LBI's own compliance personnel “largely did their jobs.” With several exceptions that are highlighted in the report, most customer property was intact and accessible for satisfaction of customer claims or transfer to other brokers – precisely the purpose of the regulations. For example, the report found general compliance with rules designed to prevent commingling of broker-dealer and investor assets.

    [Go To Top]


    International Affiliates


    The Trustee advocates cooperation among the administrators of Lehman entities from around the world and formalization of such cooperation through multilateral or bilateral protocols. The Trustee and his professionals continue to work with administrators for insolvency proceedings applicable to Lehman entities outside of the United States.


    [Go To Top]


    Adversary Proceedings


    Citibank Adversary Proceeding


    The Trustee has commenced an adversary proceeding (Adv. Proc. No. 11-01681) against Citibank, N.A., Citigroup, Inc. and various of their affiliates (“Citibank”) to recover more than $1.3 billion in cash and other assets of LBI held by them. The Trustee seeks the return of a $1 billion deposit LBI made in its last week of operations in connection with a settlement service provided by Citibank, namely the settlement of payments for foreign exchange transactions through the Continuous Linked Settlement (“CLS”) system. In addition, claims are asserted to recover approximately $300 million in payables and deposits in LBI accounts at various Citibank locations around the world and under a buyer's demand note relating to an asset purchase agreement going back to the 1990's. A number of the Trustee's claims raise complex issues regarding the scope of the Bankruptcy Code safe-harbor provisions and so-called triangular setoffs.

    In the Citibank litigation, the Trustee is represented by its special counsel, Menaker & Herrmann LLP (http://www.mhjur.com/). The commencement of litigation follows months of investigation and efforts by the Trustee and his special counsel to reach consensual resolution.

    Click here for the scheduling order and discovery plan in the litigation.

    Adversary Proceedings In Which LBI Is A Defendant


    • Evergreen Solar, Inc. v. Barclays PLC (Case No. 08-1633)
      • Click here for the Memorandum Decision granting the motions to dismiss the adversary proceeding.
    • Federal Home Loan Bank of Pittsburgh v. Lehman Brothers Holding Inc. (Case No. 09-1393)
      • Click here for the Stipulation and Order entered dismissing the adversary proceeding with prejudice.
    • Hank's Living Trust v. Lehman Brothers OTC Derivatives Inc. (Case No. 09-1054)
    • Mazzatta v. Lehman Brothers OTC Derivatives Inc. (Case No. 09-1131)
    • Neuberger Berman LLC v. Brown Brothers Harriman & Co. et al (Case No. 10-3610)
    • Neuberger Berman LLC v. Fridator Trust et al (Case No. 10-3612)
    • Nomura Global Fin. Prods. Inc. v. Lehman Brothers Special Fin. Inc. (Case No. 09-01061)
    • The Options Clearing Corp. v. Barclays Capital Inc. (Case No. 08-1759)
    • PT Bank Negara Indonesia (Persero) TBK v. Lehman Brothers Special Fin. Inc. (Case No. 09-1480)


    Avoidance Actions Commenced By Trustee


    The Trustee has commenced the following adversary proceedings with respect to certain preference claim matters:
    • Giddens v. Revere Data, LLC (Adv. Proc. No. 10-3568)
    • Giddens v. Stirling Club (Adv. Proc. No. 10-3569)
    • Giddens v. GFI Group Incorporated (Adv. Proc. No. 10-3570)
    • Giddens v. Right Management Consultants, Inc. (Adv. Proc. No. 10-3577)
    • Giddens v. St. Regis New York (Adv. Proc. No. 10-3583)
    • Giddens v. Casey Securities Inc. (Adv. Proc. No. 10-3591)
    • Giddens v. Townsend Analytics Ltd. (Adv. Proc. No. 10-3592)
    • Giddens v. SeamlessWeb Professional Solutions, Inc. (Adv. Proc. No. 11-1264)
    • Giddens v. Dow Jones & Company, Inc. (Adv. Proc. No. 11-1716)

    [Go To Top]


    Data and Transition Services


    The Trustee and his professionals continue to work diligently to migrate from Barclays' computer systems and establish an independent information infrastructure. Given the nature and complexity of the systems, data migration requires extensive work, and has resulted in the transfer of over 82 terabytes of information. For more information on this topic, see Section XIV of the Trustee's Fourth Interim Report.



    The Trustee has had to rely on Barclays for access to many of the pre-Filing Date LBI books, records, and information in electronic form, as well as assistance from knowledgeable former LBI personnel now employed by Barclays. The Court approved an access agreement on April 22, 2009 to implement the legal requirements that the Trustee has access to information. The parties concluded a more comprehensive transition services agreement that the Court approved by Order on March 22, 2010. The Trustee nevertheless continues to reduce reliance on Barclays personnel and Barclays systems to lessen the considerable expense and assure prompt and unimpeded access to information.


    On March 2, 2011, the Court entered a Stipulation and Agreed Order with respect to an Access Amendment to the Transition Services Agreements.

    [Go To Top]


    Tax Matters


    The Trustee and his professionals continue to monitor or respond to several federal, state, and local tax audits; to respond to requests for tax-related information from international, federal, state, and local authorities; and to coordinate all tax reporting requirements. If you previously received Forms 1099 as a Lehman account holder to report items such as interest and dividends, please note that no reportable activity occurred during the 2009 calendar year. Therefore, 2009 Forms 1099 were not required to be issued. 2008 is the last year for which such Forms will be issued by Lehman to account holders. If you have any questions, please call our Tax Information Reporting Call Center at 888-770-7899. Please note that the Center cannot issue revised forms, provide copies of monthly account statements, or provide tax advice.



    Cost Basis Information


    • We are unable to provide you with cost basis information relating to sales of securities that took place during the time you were a Lehman account holder. Please contact your investment advisor or refer to the monthly statements that were provided to you throughout the years to calculate the appropriate cost basis. We are unable to provide you with additional copies of monthly statements.

    Tax Advice


    • We are unable to provide you with tax advice. Please contact your tax advisor.

    [Go To Top]


    Employee Benefits


    Aceso Holdings Health Care Trust


    • Prior to the SIPA liquidation, Aceso Holdings, Inc., a wholly-owned subsidiary of LBI, transferred $95 million in connection with its establishment of a health care trust (the “Health Care Trust”) to fund the payment of benefits under the Lehman Brothers Holdings Inc. Group Benefits Plan (the “Health Plan”). Until the beginning of April 2009, funds continued to be wired out of the Health Care Trust bank account to pay tail Medco Health and Aetna charges as well as to fund other costs of the Health Plan for employees of all sponsoring employers on a daily basis. As a result of discussions among the Trustee, LBHI and the Department of Labor regarding the ownership and disposition of the Health Care Trust assets, as of January 1, 2010 the Trustee agreed, without prejudice to any future claims LBI may have to the funds, to permit resumption of the use of Health Care Trust funds to pay for post-retirement health care benefits previously offered under the Health Plan. The Trustee continues to pursue a resolution of all claims relating to, and the final disposition of, the Health Care Trust.


    Bonus Advances & Tuition Payment Programs


    • Certain employees of LBI were entitled to participate in advance programs that entitled them to immediate receipt of a cash award in return for executing a promissory note that obligated them to repay the cash award in full with margin rate interest upon certain terminations of employment. LBHI continues to assert that even though LBI is the named holder of the promissory notes, the loans were transferred to LBHI and any recoveries thereunder belong to LBHI.
    • Despite the difference in opinion as to the ownership of any proceeds, the Trustee has negotiated and entered into a cooperative stipulation with LBHI that allows LBHI to pursue amounts owed under the promissory notes pending a final determination as to ownership. The terms of the stipulation generally provide for the party prevailing on ownership to bear the costs of recovery. LBHI continues to pursue recoveries under the promissory notes and to report to the Trustee on a regular basis as to the amount recovered.


    Demand Note in Favor of LBI


    • In connection with an Asset Purchase Agreement from 1993 between Shearson Lehman Brothers, Inc. (now LBI) and Smith Barney, a buyer's demand note was issued in favor of LBI in respect of certain vested benefits under its deferred compensation plans as of the date of the asset sale. The Trustee's special counsel has been conferring with Citibank's counsel in an effort to resolve questions regarding rights to demand payment under the note, from which there remains approximately $10 million left to be drawn.


    Termination of the LBHI Retirement Plan Issues


    • The Trustee continues to monitor the effect of the settlement agreement reached among LBHI, the LBHI Retirement Plan's plan administrator, Neuberger Berman and the PBGC with respect to LBI's liability in connection with the termination of the LBHI Retirement Plan. The Trustee has been involved in discussions with LBHI concerning invoices sent to LBI whereby LBHI requested reimbursement for professional fees incurred by it in connection with services it performed in analyzing the termination of the LBHI Retirement Plan.

    [Go To Top]


    Executory Contracts

    The Trustee's professionals continue to determine whether contracts that remained with the estate after the Barclays transaction, would be beneficial to the estate and further the purposes of the liquidation, or result in consideration to the estate through assignment to third parties. In order for the Trustee's professionals to conduct this review, and preserve the rights of the estate in executory contracts and unexpired leases, the Bankruptcy Court has granted the Trustee's requests to extend the time within which the Trustee may assume, assign or reject the LBI's executory contracts and certain unexpired leases, as provided in section 365(d)(1) of the Bankruptcy Code to, and including, February 3, 2012.




    Closing Date Contracts




    Designated Contracts



    Rejected Contracts


    [Go To Top]


    Real Estate


    As of May 30, 2009, all leases previously held by LBI had been rejected or assumed and assigned. Additionally, the Trustee is continuing to investigate any potential real estate assets that the estate may own or have an interest in.


    [Go To Top]


    Insurance


    The Trustee has evaluated insurance coverage under which the LBI Estate and/or customers could benefit. The Trustee's team has analyzed available insurance policies to determine their applicability, and monitored proceedings in the bankruptcy court to assess the potential exhaustion of such policies. Additionally, the Trustee is continuing to investigate facts to determine the existence and/or scope of insurable losses and whether notice under additional insurance policies would be appropriate.


    [Go To Top]


    URL: