February 25, 2009

The goal under the Securities Investor Protection Act of 1970 ("SIPA") is to transfer securities and cash as promptly as practicable to customers of a failed brokerage firm. In that regard SIPA provides for the bulk transfer of accounts to other firms. James W. Giddens, the Trustee for the liquidation of Lehman Brothers Inc. ("LBI") reported that, as envisioned by SIPA, immediately following the commencement of the liquidation on September 19, 2008, with extraordinary contributions from many participants, including SIPC, the Securities and Exchange Commission, the Federal Reserve Bank of New York, the Commodity Futures Trading Commission, and professionals at Hughes Hubbard & Reed LLP and Deloitte & Touche LLP, over 135,000 customer accounts containing an estimated $140 billion of property were transferred to Barclays Capital Inc. and Neuberger Berman, LLC.

The Trustee also reported that an additional estimated $3 billion of property has been transferred on behalf of prime brokerage account customers in a consensual process that began in mid-October.

These transfers of property in customer accounts were performed prior to the receipt of customer claims, fulfilling SIPA's mandate for the prompt return of cash and securities, and reflecting the safeguards provided under SIPA for protecting customer assets.

These transfers did not involve all LBI accounts. Barclays Capital Inc. purchased only certain assets of the Lehman entities, including a select number of customer accounts. The accounts remaining are part of the SIPA liquidation claims process.

Mr. Giddens also said: "I am also pleased to report that customer claim processing – an enormous undertaking of unprecedented size and complexity – is currently underway, and that significant progress has already been made since January 30, 2009, the date for filing customer claims to be eligible for the maximum protection under SIPA. To date, claims on behalf of more than 80,000 potential customers and other creditors have been received, with many thousands more expected in the months ahead. Multiple claims have already been determined, and over $1 billion of property has been distributed in the claims process."

To process the claims efficiently, the Trustee has organized a staff of claims professionals, accountants, and attorneys at the Trustee's liquidation office. This team of dedicated professionals continues to work around-the-clock to resolve difficult factual and legal questions, reach determinations on customer claims, notify claimants, and return property to LBI customers.

The claims process under SIPA provides for the orderly and efficient examination and satisfaction of customer claims, and it has continued to function well in the LBI liquidation. Nevertheless, Lehman Brothers operated as a global firm in over 40 countries with cross-border interdependencies and investment assets with cross-border implications. As a result, Lehman Brothers entities are now subject to insolvency proceedings in at least fifteen countries worldwide. The coordination of these proceedings requires extensive international cooperation among the various Lehman entities and their regulators. The treatment of customer claims related to cross-border transactions, often involving complex derivatives instruments and other financial products, will also present important and novel legal issues.

The bar date for filing customer and general creditor claims is June 1, 2009. Claim forms and information about how to fill them out are maintained on the Trustee's website, www.lehmantrustee.com. Given the enormity of the task and the high volume of claims that arrive on a daily basis, there is no current estimate of when all claim determinations will be complete, or what the total dollar amount of customer or other claims may be. Producing determination letters for all customer claims will take several months, and any contested claims will be subject to judicial resolution.