I must admit I haven't had as much time to dedicate to the Lehman case as my attention is being focused on WaMu for now. Once I have more time to dedicate to Lehman, I'll be able to update the forum with more information. Just recommending people buy now. It'll be the same case with Lehman as it was with WaMu in the sense you'll see a large run-up in PPS before trial. Lehman is a totally different machine though, and I'll try to elaborate on this more later. Here's some quick reading you might want to do if you want more information on this matter:
$10B in NOLs in Lehman stocks-->
Court motion to restrict 5% owners of stocks in increasing their positions to preserve $10B in NOLs. Equities are safe.
http://chapter11.epiqsystems.com/viewdocument.aspx?DocumentPk=e8647fe7-b6c0-42fb-9842-24967e0e1477
Lehman shareholders will own the spinoff
"The second initiative involved the transfer of the Company’s
commercial loan assets to a new company which would be owned by the Debtor’s
SHAREHOLDERS. Management believed that divorcing the real estate assets from the rest of
the Company would relieve the pressure on the Company, while permitting shareholders
to benefit from the full value of such assets when the markets recover."
PAGE 10 NO.28
http://online.wsj.com/public/resources/documents/lehmannarrative20080916.pdf
Stock plan for Lehman creditors
http://www.ft.com/cms/s/93a88ce0-f0...8a-a517-11dd-b4f5-000077b07658,print=yes.html
By Julie MacIntosh, Francesco Guerrera and Nicole Bullock in New York
Published: February 1 2009 23:33 | Last updated: February 1 2009 23:33
Creditors of Lehman Brothers would receive stock rather than cash under a plan that could separate its illiquid assets into two companies, which would force them to wait for repayment but potentially boost their returns.
The plan would allow Lehman to cordon off difficult-to-sell assets and wait for the markets to improve, preventing a fire sale of its holdings, said Bryan Marsal, co-head of Alvarez and Marsal, which is managing Lehman’s liquidation. It is now in its preliminary stages but, if it is adopted, the two standalone companies could be publicly listed within two years.
One of the companies would include Lehman’s real estate holdings, now valued at $43bn, which could prove difficult to sell at a time when the commercial real estate market is only just starting to suffer from corporate lay-offs and liquidations.
The bank’s other illiquid assets, including private equity investments and proprietary investments such as its stake in SkyPower, a Canadian renewable energy company, would be gathered into the second company.
Lehman had $12.3bn in principal investments as of September 30, plus additional commitments that it had not yet funded.
Lehman, which filed for the largest bankruptcy in history in September, would distribute stock in those companies into a trust that would benefit its creditors. That stock would eventually be converted to cash as assets are sold.
Lehman is considering the future of the industrial bank it operates in Utah and Lehman Brothers Bank, its thrift. It may try to convince US regulators that the two banks are financially viable and, therefore, eligible to sell loss-making assets into the $700bn troubled asset relief programme.
Lehman approached the US Treasury late last year to request inclusion in the Tarp but was denied, said Mr Marsal. The bank plans to reapply for Tarp assistance.
Lehman’s advisers have hired more than 200 former Lehman employees to help sell its securities and other liquid assets, which range from derivatives to corporate jets. Dick Fuld, the company’s former chief executive, is working on a month-to-month basis to help lobby counterparties for better recovery terms.
Lehman’s US operations managed $26bn of the total $47bn in global derivatives receivables Lehman was owed when it filed for bankruptcy. Alvarez and Marsal has collected on $2.5bn of that exposure.
Copyright The Financial Times Limited 2009
Is the Calvary on its way? Congress is getting into the LEHMAN game?
http://dealbook.blogs.nytimes.com/2009/09/17/lawmaker-introduces-bill-to-speed-return-of-lehman-assets/
Lawmaker Seeks to Speed Return of Lehman Assets
A Washington lawmaker is trying to persuade his colleagues in Congress to weigh in on the liquidation of Lehman Brothers, a year after the once-pound Wall Street firm imploded.
Gregory W. Meeks, a Democrat who represents New York’s Sixth Congressional District, has introduced a concurrent resolution calling on the administrators of Lehman’s bankruptcy in the United States and Britain to establish an international framework to ensure the swift return of customer claims. In particular, Mr. Meeks’ measure focuses on $50 billion in hedge fund assets held at Lehman’s prime brokerage unit in London.
Concurrent resolutions are not presented to the president and do not have the force of law, but are meant to express the sentiments of Congress.
PricewaterhouseCoopers is overseeing the liquidation of the London-based unit, called Lehman Brothers International Europe, or LBIE. In July, the accounting firm and several creditors reached an agreement to expedite the repayment of the assets held in the prime brokerage unit, but Britain’s high court rejected the settlement.
In the resolution, Mr. Meeks said the personal liability imposed on PricewaterhouseCoopers by British law has slowed down the process of returning assets to Lehman’s customers. He suggests the proper authorities in Britain consider relieving the accounting firm of personal liability in the LBIE case.
Several hedge funds, including Ramius, Highbridge Capital Management, GLG Partners, Newport Global Opportunities Fund, Amber Capital and Harbinger Capital Partners, have had their accounts frozen since Lehman filed for bankruptcy last year.
Several funds have asked members of Congress over the past several months to intervene on their behalf with British authorities.
“Despite the goodwill efforts by our members, the trustees of LBIE and others to find a solution for over a year, we are still on square one,” said Stuart Kaswell, the general counsel of the Managed Funds Association, which represents the hedge fund industry. “What is overlooked here is that this represents $50 billion of assets that belong to pension funds and institutional endowments who need the liquidity locked up in LBIE more than ever.”
The assets frozen in LBIE include stocks, bonds, derivative contracts and other securities owned by hedge funds, insurance companies and other investors. Mr. Meeks’ resolution also requests that the Securities and Exchange Commission dedicate sufficient resources to protecting investors, including those owning $150 billion worth of bonds, in Lehman’s bankruptcy case in the United States.
“Not only have market losses occurred, but in Lehman U.K, the money is trapped,” said Tracy Maitland, head of Advent Capital Management. “Additionally, many school endowments are laying off teachers, and the return of their assets will go a long way toward helping them fund their historical levels of services.”
