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

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Latest News

Update on Secured, Administrative, and Priority Claim Distributions

September 9, 2014- Trustee Statement on Initiating First Interim Distribution to Unsecured General Creditors

September 9, 2014- Trustee’s 11th Interim Report For the Period February 15, 2014 Through September 9, 2014

September 9, 2014- Liquidation Balance Sheet As of July 31, 2014

August 15, 2014- Trustee Statement On Fund for First Interim Distribution to Unsecured General Creditors

August 15, 2014- First Interim General Unsecured Distribution Notice

August 5, 2014- Trustee Statement On Appeals Court Barclays Ruling

July 30, 2014- Trustee Statement On First Interim Distribution to General Creditors

July 2, 2014- Update on Secured, Administrative, and Priority Claim Distributions

June 26, 2014- Trustee Statement On First Interim Distribution to General Creditors

June 26, 2014- Reserving Motion for Unsecured Claims

June 19, 2014- Trustee Statement Regarding Secured and Priority Claim Payments

May 21, 2014- Tenth Notice Regarding Disposition of LBI Estate Securities

May 9, 2014- Statement on Step for General Creditor Interim Distribution

May 8, 2014- Reserving Motion for Priority and Secured Claims

April 30, 2014- Statement on Estate Wind Down and General Creditor Distributions

April 29, 2014- Liquidation Balance Sheet

April 29, 2014- Quarterly Report on the General Creditor Claims Process

April 7, 2014- Ninth Notice Regarding Disposition of LBI Estate Securities

March 3, 2014- Eighth Notice Regarding Disposition of LBI Estate Securities

February 18, 2014- Seventh Notice Regarding Disposition of LBI Estate Securities

February 14, 2014- Trustee’s Tenth Interim Report for the Period June 15, 2013 through February 14, 2014

February 12, 2014- Sixth Notice Regarding Disposition of LBI Estate Securities

January 29, 2014- Update on LBJ Settlement

January 7, 2014- Notice of re: Hong Kong High Court Administrative Hearing - Lehman Brothers Securities Asia Limited’s application on Third Party Security Interests

December 6, 2013- Notice of Hong Kong High Court Administrative Hearing re: Lehman Brothers Securities Asia Limited’s application on Third Party Security Interests

December 2, 2013- Fifth Notice Regarding Disposition of LBI Estate Securities

November 18, 2013- Fourth Notice Regarding Disposition of LBI Estate Securities

November 12, 2013- Third Notice Regarding Disposition of LBI Estate Securities

November 4, 2013- Second Notice Regarding Disposition of LBI Estate Securities

October 28, 2013- Notice Regarding Disposition of LBI Estate Securities

September 13, 2013- Statement on Lehman Five Year Anniversary

August 28, 2013- Information on Trustee's Motions

June 25, 2013- Trustee’s Statement Regarding Bankruptcy Court Repo Ruling

June 25, 2013- Memorandum Decision Confirming The Trustee's Determination Of Claims Relating To Repurchase Agreements

June 7, 2013- Trustee’s Statement Regarding 100 Percent Distribution to Customers

To receive a distribution, holders of certain allowed Secured, Administrative and Priority claims must submit the appropriate IRS tax form(s) and an Office of Foreign Assets Control (OFAC) Certification. More information about these forms and their submission is available in the Notice to Holders.


Depending on your citizenship and claim type, different types of IRS tax form(s) should be submitted. To determine which type of IRS tax form(s) you need to submit, please review the Notice to Holders and consult your accountant or tax specialist. All holders of allowed Secured, Administrative and Priority claims must also submit an OFAC Certification to receive a distribution. The IRS tax form(s) and the OFAC Certification mentioned in the Notice to Holders are available for download here.


For additional information on Secured, Administrative and Priority claim distributions, please see the update here.

FORMS 1099

The Trustee has issued all Forms 1099-INT, 1099-DIV, and 1042-S, to the extent he is required by law to do so, to certain former account holders for whom there was reportable activity in 2013. The Trustee has issued all Forms 1099-MISC for vendors and independent contractors for tax year 2013. The Trustee was not required to issue any Forms 1099-B for tax year 2013.


If you have any questions, you may contact the Trustee’s hotline at 1-866-841-7868, or send an email to teamlehman@hugheshubbard.com. Please include a contact phone number where you can be reached. Please note that the Trustee’s staff cannot provide tax advice.


For answers to frequently asked questions about tax forms, please click here.


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 Shelley C. Chapman, United States Bankruptcy Court for the Southern District of New York (Case No. 08-01420 (SCC) (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.


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

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.



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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.


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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:




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



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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.



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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:





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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.




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Trustee's Presentations


Presentations to the Bankruptcy Court




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Presentations to the Managed Funds Association




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Other Presentations




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Protocol & Notices


Case Management Orders




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Notices




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Protocols




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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.


All former securities customers are being satisfied at 100% of their net equity. Distributions to date exceed $100 billion and are continuing. The process of analyzing, objecting to, settling, and otherwise resolving the more than 12,000 filed general creditor claims is advancing.





Distributions


All former securities customers are being satisfied at 100% of their net equity. Distributions to date exceed $100 billion and are continuing.


In order to receive distributions, claimants must return a signed release to Epiq Bankruptcy Solutions at:


Epiq Bankruptcy Solutions LLC
757 Third Avenue, Ste. 302
New York, New York 10017-2063

Release forms have been mailed to all claimants with allowed customer claims.


The distributions are made possible by settlements negotiated by the Trustee with LBHI and LBIE, which are now effective.



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Administrative Claims


Note: THIS DEADLINE DID NOT RELATE TO ANY CUSTOMER OR GENERAL CREDITOR CLAIM THAT AROSE PRIOR TO SEPTEMBER 19, 2008 AND ANY SUCH CLAIM IS NOW TIME-BARRED. THIS DEADLINE HAS NO EFFECT ON PREVIOUSLY SUBMITTED CLAIMS AND CLAIMANTS THAT FILED CUSTOMER OR GENERAL CREDITOR CLAIMS THAT AROSE PRIOR TO SEPTEMBER 19, 2008 NEED NOT RESUBMIT THEIR CLAIMS.


The deadline has now passed for the submission of claims for administrative expenses against the Lehman Brothers Inc. (LBI) estate arising between September 19, 2008 and August 31, 2013.


Administrative claims are being reviewed as part of the general creditor reconciliation process. The Administrative Bar Date is a step that will help provide certainty on the amount of administrative expenses claimed against the LBI estate. This will support further progress in the administration of the general estate.



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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.



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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 nealy 9,000 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 the Trustee's Allocation of Property of the Estate pursuant to SIPA seeking Bankruptcy Court approval of an allocation of assets available to satisfy claims. On March 2, 2010, the court entered an Order approving the motion.


On December 1, 2011, the Trustee filed a second motion seeking an order approving the Trustee’s Allocation of Property of the Estate pursuant to SIPA. On April 30, 2012, the Trustee filed a Statement in Further Support of the Second Motion for Order Approving the Trustee’s Allocation of Property. The liquidation has reached a stage where the great bulk of the assets that will be available for distribution are under control of the estate. The second proposed allocation order sets forth the principles by which assets will be allocated to the customer and general estates. The Trustee has been working with interested parties to come to agreement on allocation. An order approving the allocation motion is a prerequisite to distributions from the LBI estate.


On January 31, 2013, the Trustee filed a supplement to the second motion seeking Court approval for the Trustee’s allocation of property. The filing of this supplement followed the Trustee reaching agreements in principle with LBIE and LBHI and supported the goal of an allocation of customer property sufficient to satisfy allowed customer claims in full. On April 16, 2013, the court entered an order approving the supplement motion.



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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.



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General Creditor Claims


The process of analyzing, objecting to, settling, and otherwise resolving the more than 12,000 filed general creditor claims is advancing. On July 31, 2013, the Trustee filed with the Bankruptcy Court a Quarterly Report on the general creditor claims process.


Having now reached settlements with LBIE, LBHI, and Lehman Brothers Finance, SA (LBF) to resolve the claims among their respective entities, and having substantially completed the processing of customer claims filed against the LBI estate, the Trustee has good reason to believe there will be a meaningful distribution to LBI general creditors.


Accordingly, in keeping with SIPA and section 704(a)(5) of the Bankruptcy Code, the Trustee has initiated a comprehensive review and reconciliation of all general creditor claims filed in this proceeding to determine the validity and actual allowed amounts of such claims, and has begun the process of objecting to claims by filing omnibus objections to general creditor claims pursuant to section 502(b) of the Bankruptcy Code, as made applicable to this proceeding pursuant to SIPA sections 78fff(b) and 78fff-1(a), and Bankruptcy Rule 3007(d)(1).


In the interest of reducing the administrative and financial burden imposed on the Court and the LBI estate and expediting the process of reconciling the general creditor claims, the Trustee filed on October 22, 2012, a a Motion for approval of general creditor claim objection procedures and settlement procedures. On November 15, 2012, the Bankruptcy Court entered an Order approving the general creditor claim objection procedures. The proposed settlement procedures will be heard by the Bankruptcy Court on February 13, 2013.


The Trustee, by and through his Claims Agent, EPIQ Systems, maintains Customer and General Creditor Claims Registers. Parties-in-interest may obtain online access to review the General Creditor Claims Register and filed-claim forms by clicking here. Please note the claim images have been redacted and supporting documentation removed. To view claim images with supporting documentation consisting of addendums, annexes, supplements, summaries, exhibits please contact Epiq Systems at 646-282-2500 for secure access. Any supporting documents which have been deemed sensitive in nature such as employee letters or account statements have been removed. If you require a complete copy of the claim image you may contact Epiq Systems at 646-282-2500. Parties should take notice of the disclaimer associated with the General Creditor Claims Register.


Parties-in-interest may obtain online access to review the Customer Claims Register and filed-claim forms by contacting EPIQ Systems at (646) 282-2500. Parties should take notice of the disclaimer also accompanying the Customer Claims Register 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.



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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 view the General Creditor Claims Register here and may obtain online access to review the Customer Claim Register 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.



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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.



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Claims Trading


Both customer and general 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.



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Resolved Customer Claims Matters


Repurchase Transactions


  • Memorandum Decision Confirming The Trustee's Determination Of Claims Relating To Repurchase Agreements (June 25, 2013)


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TBAs and Other Forward Transactions


  • Memorandum Decision Confirming the Trustee’s Determination of Claims Relating to TBA Contracts (12/8/2011)
  • Order Confirming the Trustee’s Determinations of Claims Relates to TBA Contracts (12/20/2011)


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Soft Dollar Commission Credits


  • Memorandum Decision Confirming the Trustee’s Determination of Claims Relating to Soft Dollar Commission Credits (7/10/2012)
  • Order Confirming the Trustee’s Determination of Claims Related to Soft Dollar Commission Credits (7/16/2012)


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Shorts Valuation Date


  • Memorandum Decision Granting Motion to Uphold Determination of Claim by SIPA Trustee regarding the claim of Fifth Third Structured Large Cap Plus Fund (6/1/2010)
  • Order Upholding Determinations with Respect to Certain Claims Based on Short Positions Held in Prime Brokerage Accounts at LBI and Expunging Objections Thereto (3/31/2011)


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Miscellaneous Objections


  • Order 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 (8/19/2010)
  • Order 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 (12/9/2010)


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MainStay Motion



  • Stipulation and Order Withdrawing Without Prejudice the Motion of Mainstay High Yield Opportunities Fund for an Order Pursuant to Sections 363, 541, and 105 of the Bankruptcy Code for Relief from the Automatic Stay to Remove Lehman Brothers Inc. as Agent and Granting Related Relief (2/16/2011)


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Fraud/Misrepresentation/Market Loss/Hedging


  • Order Upholding Determinations Denying Customer Status to Claims Arising from Alleged Fraud, Misrepresentation, Market Loss or Hedging Transactions and Expunging Related Objections Thereto (11/3/2010)


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Foreign Currency Transactions (FX)


  • Order Upholding the Trustees Determinations as to Certain Claims (I) Arising from Pre-Petition Misdirected Wires; (II) Based Upon Foreign Currency Transactions with LBSF; and (III) Received by the Trustee After the Bar Date and Expunging Objections Thereto (3/28/2012)
  • Order Confirming the Trustees Determinations Regarding Skandinaviska Enskilda Banken AB (Publ)s Claim for Cash on Deposit in Connection with Forward Foreign Currency Transactions and Expunging Related Objections Thereto (10/17/2011)
  • Order Confirming the Trustees Determinations Regarding Certain Claims for Cash on Deposit in Connection with Forward Foreign Currency Transactions and Expunging Related Objections Thereto (6/30/2011)


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On February 16, 2013, the Trustee, Lehman Brothers Holdings Inc. (LBHI) and certain of its affiliates, and the Joint Administrators of Lehman Brothers International (Europe) (LBIE) entered into two separate settlements resolving all intercompany claims between LBI on the one part, and LBHI and LBIE on the other part. On April 16, 2013, U.S. Bankruptcy Judge James M. Peck of the Southern District of New York approved the two separate settlements, and the settlements were effective as of June 7, 2013.

These separate settlements resolve billions of dollars of complex intercompany claims and liabilities between the parties. The settlements also provide a final resolution of all legal and factual issues regarding intercompany relationships between LBI and LBHI and between LBI and LBIE, avoiding the need for costly litigation.

All retail customers of LBI were made whole in the first days of the liquidation, and with the agreements approved, the Trustee expects to satisfy the remaining valid affiliate, institutional and hedge fund customer claims. The reduction of affiliate claims in this, the largest and most complex bankruptcy in history, is a milestone for customer protection.

On February 16, 2013, the Trustee Lehman Brothers Holdings Inc. (LBHI) and certain of its affiliates announced that an agreement in principle had been reached to resolve all claims among their respective entities.


NOTE: THE SALE TO BARCLAYS CLOSED ON SEPTEMBER 22, 2008

Update on Barclays Matters


UPDATE: On August 5, 2014, the U.S. Court of Appeals for the Second Circuit affirmed the U.S. District Court’s ruling regarding certain assets in dispute with Barclays following the sale of LBI to Barclays in September 2008. For the Trustee’s statement, click here; for the ruling, click here.


On June 7, 2012, the Trustee filed a notice of appeal to the United States Court of Appeals for the Second Circuit regarding a ruling handed down by Judge Katherine B. Forrest of the U.S. District Court for the Southern District of New York. Judge Forrest’s ruling was on appeals from the Trustee and Barclays Capital Inc. stemming from the Bankruptcy Court’s opinion on assets disputed by the parties related to the September 2008 sale of LBI to Barclays. The Trustee, Barclays and various other parties have filed briefs regarding the appeal to the Second Circuit, and the parties conducted oral argument before the Second Circuit on May 29, 2013.


The Trustee is appealing the District Court’s decision on the margin and clearance box assets. The Trustee believes he has strong grounds for recovering these assets for the ultimate benefit of LBI customers and other creditors.


On September 20, 2012, the Trustee filed his brief to the Second Circuit, and the Securities Investor Protection Corporation filed a brief of intervenor to the Second Circuit.

Judge Forrest, in a June 5, 2012 ruling, rejected Barclays’ claim to $769 million in LBI’s Rule 15c3-3 customer reserve accounts and $507 million that is considered part of LBI’s required Reserve Bank Account. Judge Forrest also ruled that the LBI estate is not entitled to approximately $3.5 billion in margin and other assets used to support LBI’s derivatives trading and roughly $2 billion in certain assets in LBI’s clearance boxes at Depository Trust & Clearing Corporation.


The Trustee strongly believes that the former customers of Lehman Brothers Inc. are entitled to the margin and clearing box assets and that the law and facts support his claims to these assets, and his duty to customers mandates that he continue to pursue all legal avenues to recover the assets for the LBI estate.


The District Court’s ruling overturned a previous ruling by U.S. Bankruptcy Judge James M. Peck awarding margin and other assets to the LBI estate. In the earlier decision, made after 34 days of trial, Judge Peck rejected Barclays’ claims to the margin assets. Judge Peck found that the assets remained with the LBI estate and did not transfer to Barclays with the sale in 2008. The Trustee believes the Bankruptcy Court’s carefully considered factual findings and rulings were correct and that these assets should be available to repay LBI’s public customers and others.


Due to the expected extended legal process on these issues, the Trustee has appropriately reserved for the Barclays litigation.



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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




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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.


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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.


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Trustee's Statements and News Releases


  • Statement on Initiating First Interim Distribution to Unsecured General Creditors (September 9, 2014)

  • Statement on Fund for First Interim Distribution to Unsecured General Creditors (August 15, 2014)

  • Statement on Appeals Court Barclays Ruling (August 5, 2014)

  • Statement on First Interim Distribution to General Creditors (July 30, 2014)

  • Update on Secured, Administrative, and Priority Claim Distributions (July 2, 2014)

  • Statement on First Interim Distribution to General Creditors (June 26, 2014)

  • Statement on Payment of Secured and Priority Claims (June 19, 2014)

  • Statement on Step for General Creditor Interim Distribution (May 9, 2014)

  • Statement on Estate Wind Down and General Creditor Distributions (April 30, 2014)

  • Update on LBJ Settlement (January 29, 2014)

  • Statement Regarding Lehman Five Year Anniversary (September 13, 2013)

  • Statement Regarding Bankruptcy Court Repo Ruling: June 25, 2013

  • Statement Regarding 100 Percent Distribution to Customers: June 7, 2013

  • Statement Regarding Approval of LBI Agreements With LBIE and LBHI: April 16, 2013

  • Joint Announcement on LBI, LBIE and LBHI Final Agreements: February 26, 2013

  • Statement Regarding Lehman Brothers Inc. and Citibank, N.A. Agreement: November 16, 2012

  • Joint Announcement from LBI and LBIE Regarding an Agreement in Principle: October 5, 2012

  • Statement Regarding Appeal of the Federal Court Ruling on Barclays Litigation: June 7, 2012

  • Statement Regarding the Federal Court Ruling on Barclays Litigation: June 5, 2012

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

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

  • FAQ on the State of the Estate: September 8, 2011

  • 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

  • News Release Preliminary Investigation Report: August 25, 2010

  • 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

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

  • Statement Regarding the October 14, 2008 Prime Brokerage Protocol: January 23, 2009

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

  • News Release: James W. Giddens, Lehman Brothers Inc. SIPC Trustee, Reports on Progress of U.S. Liquidation: September 26, 2008


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SIPC Releases


  • SIPC Press Release SIPC Applauds Lehman Trustee on Milestone 100 Percent Return of Securities Customers’ Property: June 7, 2013

  • SIPC Press Release Lehman Agreements to Result in Billions of Dollars in Additional Customer, Creditor Distributions: February 26, 2013

  • SIPC Press Release Lehman Agreement Paves Way for 100 Percent Return of Customer Property: October 5, 2012

  • SIPC Press Release James W. Giddens, Lehman Brothers Inc. SIPC Trustee, Reports on Progress of Customer Claim Processing: February 25, 2009

  • SIPC Press Release SIPC: Claims Forms Mailed to Lehman Brothers Inc. Customers and Creditors: December 2, 2008

  • SIPC Press Release SIPC: James W. Giddens, Lehman Brothers Inc. SIPC Trustee, Announces Protocols Regarding Prime Brokerage Arrangements & Other Broker-Dealer Transactions: October 7, 2008

  • SIPC Press Release SIPC: James W. Giddens, Lehman Brothers Inc. SIPA Trustee, Reports on Progress of U.S. Liquidation: September 26, 2008

  • SIPC Press Release Lehman Brothers Inc. Liquidation Proceedings Paves Way for Asset Purchase Agreement by Barclays: September 20, 2008


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Court Opinions and Trustee's Filings


  • Trustee’s Notice on First Interim General Unsecured Distribution: August 15, 2014

  • Order Establishing A Final Reserve For Secured, Administrative And Priority Claims, Allowing Certain Secured, Administrative And Priority Claims, Authorizing The Trustee To Satisfy Allowed Secured, Administrative And Priority Claims And Related Relief (July 2, 2014)

  • Notice Of First Record Date For Distribution On Certain Allowed Secured, Administrative And Priority Claims (July 2, 2014)

  • Notice To Holders Of Certain Allowed Secured, Administrative And Priority Claims Regarding General Creditor Distributions (July 2, 2014)

  • Trustee's Motion Reserving for Unsecured Claims : June 26, 2014

  • Trustee's Motion for Priority and Secured Claims : May 8, 2014

  • Trustee's Motion proposing Claims Hearings and ADR procedures (August 28, 2013)

  • Trustee's Motion regarding Administrative Claims (August 28, 2013)

  • Trustee's Motion regarding expediting and concluding Customer Distributions (August 28, 2013)

  • Memorandum Opinion Granting the Trustee’s Twenty-Eighth Omnibus Objection to General Creditor Claims (Late-Filed Claims) (July 11, 2013)

  • Memorandum Decision Confirming The Trustee's Determination Of Claims Relating To Repurchase Agreements (June 25, 2013)

  • Order Approving Settlement Agreement Among the Trustee, Lehman Brothers International (Europe) (In Administration) and the LBIE Administrators (April 16, 2013)

  • Order Approving Settlement Agreement Between the Trustee and the LBHI Entities (April 16, 2013)

  • Order Granting Trustee’s Second Motion for Order Approving the Trustee’s Allocation of Property (April 16, 2013)

  • Trustee’s Motion for an Order Approving Allocation of Property (January 31, 2013)

  • Order Approving Settlement Agreement Between the Trustee and Citibank, N.A. and Certain of its Affiliates (December 13, 2012)

  • Trustee’s Motion for an Order Approving Settlement Agreement with Lehman Brothers Bankhaus AG (In Insolvenz) (November 29, 2012)

  • Trustee’s Motion Pursuant To Section 105(A) Of The Bankruptcy Code And Federal Rule Of Bankruptcy Procedure 9019 For Entry Of An Order Approving Settlement Agreement With The Citi Parties (November 16, 2012)

  • Order Pursuant To Section 105(A) Of The Bankruptcy Code and Bankruptcy Rules 3007 and 9019(B) for Approval of General Creditor Claim Objection Procedures (November 15, 2012)

  • Order Approving Settlement Agreement Between The Trustee And Lehman Brothers Finance Ag, In Liquidation (November 15, 2012)

  • Trustee’s Motion for Approval of General Creditor Claim Objection and Settlement Procedures (October 22, 2012)

  • Trustee’s Motion for an Order Approving Settlement Agreement with Lehman Brothers Finance AG (October 3, 2012)

  • Order Approving Sale of Navigator Shares (September 24, 2012)

  • Proof Brief Of Appellant/Cross-Appellee James W. Giddens, As Trustee For The Sipa Liquidation Of Lehman Brothers Inc. (September 20, 2012)

  • Brief Of Intervenor Securities Investor Protection Corporation (September 20, 2012)

  • Order Confirming The Trustee’s Determination Of Claims Related To Soft Dollar Commission Credits (July 16, 2012)

  • Memorandum Decision Confirming the Trustee’s Determination of Claims Relating to Soft Dollar Commission Credits (July 10, 2012)

  • Notice of Appeal to the United States Court of Appeals for the Second Circuit (June 7, 2012)

  • Order Upholding the Trustees Determinations as to Certain Claims (I) Arising from Pre-Petition Misdirected Wires; (II) Based Upon Foreign Currency Transactions with LBSF; and (III) Received by the Trustee After the Bar Date and Expunging Objections Thereto (March 28, 2012)

  • Order Confirming The Trustee’s Determination Of Claims Related To TBA Contracts (December 20, 2011)

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

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

  • Order Confirming the Trustees Determinations Regarding Skandinaviska Enskilda Banken AB (Publ)s Claim for Cash on Deposit in Connection with Forward Foreign Currency Transactions and Expunging Related Objections Thereto (October 17, 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)

  • Stipulation and Order Regarding Discovery in Connection with Objections to the Trustee's Determinations of Claims Arising Out of Repurchase and Reverse Repurchase Transactions (July 13, 2011)

  • Order Confirming the Trustees Determinations Regarding Certain Claims for Cash on Deposit in Connection with Forward Foreign Currency Transactions and Expunging Related Objections Thereto (June 30,2011)

  • Order Upholding Determinations with Respect to Certain Claims Based on Short Positions Held in Prime Brokerage Accounts at LBI and Expunging Objections Thereto (March 31, 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)

  • Opinion On Rule 60(b) Motions Issued, Case No. 08-1420 (Bankr. S.D.N.Y. February 22, 2011)

  • Stipulation and Order Withdrawing Without Prejudice the Motion of Mainstay High Yield Opportunities Fund for an Order Pursuant to Sections 363, 541, and 105 of the Bankruptcy Code for Relief from the Automatic Stay to Remove Lehman Brothers Inc. as Agent and Granting Related Relief (February 16, 2011)

  • Order 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 (December 9, 2010)

  • Order Upholding Determinations Denying Customer Status to Claims Arising from Alleged Fraud, Misrepresentation, Market Loss or Hedging Transactions and Expunging Related Objections Thereto (November 3, 2010)

  • Order 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 (August 19, 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)

  • Order Denying Motion Of DCI Umbrella Fund PLC, Case No. 08-CV-8119 (S.D.N.Y. April 26, 2010)


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Forms


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




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