SIPC: Lehman Agreements To Result In Billions Of Dollars In Additional
Customer, Creditor Distributions
WASHINGTON, Feb. 26, 2013
If Approved, LBI Customers Will Be Made Whole; Billions of Dollars in
Remaining LBIE and LBHI Creditor Claims Resolved
WASHINGTON, Feb. 26, 2013 /PRNewswire-USNewswire/ --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
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 http://www.lehmantrustee.com.
The Securities Investor Protection Corporation is the U.S. investor's first
line of defense in the event of the failure of a brokerage firm owing
customers cash and securities that are missing from customer accounts. SIPC
either acts as trustee or works with an independent court-appointed trustee in
a brokerage insolvency case to recover funds.
The statute that created SIPC provides that customers of a failed brokerage
firm receive all non-negotiable securities - such as stocks or bonds -- that
are already registered in their names or in the process of being registered.
At the same time, funds from the SIPC reserve are available to satisfy the
remaining claims for customer cash and/or securities held in custody with the
broker for up to a maximum of $500,000 per customer. This figure includes a
maximum of $250,000 on claims for cash. From the time Congress created it in
1970 through December 2011, SIPC has advanced $ 1.8 billion in order to make
possible the recovery of $ 117.5 billion in assets for an estimated 767,000
MEDIA CONTACT: Ailis Aaron Wolf, for SIPC, (703) 276-3265 or
All non-media/investor inquiries of SIPC should be directed to
firstname.lastname@example.org or (202) 371-8300.
SOURCE Securities Investor Protection Corporation, Washington, D.C.
Press spacebar to pause and continue. Press esc to stop.