SIPC: Lehman Agreements To Result In Billions Of Dollars In Additional Customer, Creditor Distributions

If Approved, LBI Customers Will Be Made Whole; Billions of Dollars in Remaining LBIE and LBHI Creditor Claims Resolved

WASHINGTON, DC – February 26, 2013 – Customers and creditors will be the beneficiaries of the resolution of billions in intercompany claims under two sets of agreements, one between the Lehman Brothers Inc. (LBI) Trustee and Lehman Brothers Holdings Inc. and certain of its debtor and non-debtor subsidiaries (LBHI) and the other between the LBI Trustee and the Joint Administrators Lehman Brothers International (Europe) (LBIE).

Under the agreements, securities customers should receive full satisfaction of their claims and distributions from the general estate will be facilitated, according to James W. Giddens, Trustee for the liquidation of LBI under the Securities Investor Protection Act (SIPA).

The Securities Investor Protection Corporation (SIPC) today applauded the hard work of Trustee Giddens and his attorneys to reach the agreements and avoid time consuming and costly litigation that would have held up the return of customer property.

The resolutions unlock value of the LBI estate, reducing LBIE customer claims from approximately $24 billion to approximately $8 billion which can be returned to LBIE’s underlying Omnibus claimants, and reduce LBHI customer claims from approximately $19.9 billion to approximately $2.3 billion.

The agreements also contribute significantly to recoveries for LBI’s general creditors, and will help make clear a path to address remaining issues for creditors of the estate. A protocol has been agreed to by all parties for the settlement of claims remaining against the LBI estate as the Trustee focuses on liquidating remaining assets.

SIPC President Stephen Harbeck said: “Trustee Giddens and his team have reviewed hundreds of thousands of transactions and dealt with unprecedented legal complexity to achieve these resolutions without the need for protracted litigation.  SIPC always looks to maximize the return of property to customers, and through the Trustee’s efforts will now be able to see a full satisfaction of claims to LBI securities customers without further delay. SIPC looks forward to the approval of these agreements by the U.S. Bankruptcy Court and English High Court.”

Full details on the agreements can be found at