Lehman Brothers Holdings Inc., Lehman Brothers Inc. And Lehman Brothers International (Europe) Resolve Intercompany Claims

   Lehman Brothers Holdings Inc., Lehman Brothers Inc. And Lehman Brothers
              International (Europe) Resolve Intercompany Claims

  PR Newswire

  NEW YORK and LONDON, Feb. 26, 2013

       -- Milestone Agreements Resolve Billions in Intercompany Claims

-- Clears Path for Additional Distributions to LBI and LBIE Customers and LBHI

NEW YORK and LONDON, Feb. 26, 2013 /PRNewswire/ -- The Trustee for Lehman
Brothers Inc. ("LBI"), Lehman Brothers Holdings Inc. and certain of its debtor
and non-debtor subsidiaries ("LBHI"), and the Joint Administrators of Lehman
Brothers International (Europe) ("LBIE") have entered into two separate
agreements settling all intercompany claims between LBI on the one part, and
LBHI and LBIE on the other part. The LBI Trustee today filed motions seeking
approval of the agreements with the U.S. Bankruptcy Court.

These separate agreements settle billions of dollars of complex intercompany
claims and liabilities between the parties. The settlement agreements 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. The settlement agreements, along with
a number of related motions, are subject to approval by the U.S. Bankruptcy
Judge in the LBI Securities Investor Protection Act (SIPA) proceeding, the
Honorable James M. Peck, and in the case of the agreement between LBI and
LBIE, an order of the English High Court.

Upon approval, the settlements will allow LBI's Trustee to proceed with plans
to allocate and distribute sufficient cash and securities to LBI's customer
claimants, including LBHI and LBIE, to enable the LBI Trustee to satisfy valid
customer claims in full. This is a critical step in obtaining significant
value to return to LBIE's counterparties included in its Omnibus Claim and to
LBHI's creditors.

As part of the resolution, the parties have also agreed to a protocol for the
settlement of claims remaining against the LBI estate as the Trustee focuses
on liquidating remaining assets and the allowance of general estate claims.
Pursuant to the protocol following court approvals, the Trustee will file
periodic, public reports regarding the general estate with the Bankruptcy

James Giddens, Trustee for the liquidation of LBI, said: "After more than four
years of arduous negotiations involving the analysis of hundreds of thousands
of transactions with unique legal challenges, on behalf of myself and the
hundreds of professionals involved, we are delighted that these agreements
have been reached. We are also grateful to SIPC and the SEC for their
assistance in these matters. If judicially approved and implemented,
securities customers should receive full satisfaction of their claims and
distributions from the general estate will be facilitated."

Daniel Ehrmann, LBHI's head of international operations and co-head of
derivatives, said: "This milestone agreement with LBI resolves billions of
dollars of complex intercompany claims, provides LBHI and its affiliates more
than $2.3 billion in customer claims and $14 billion in general unsecured
claims, avoids costly and extensive litigation, and contributes significantly
to recoveries for LBHI's creditors. Today's settlement represents an enormous
effort over many years by multiple dedicated professionals and powerfully
underscores the benefits of reaching a consensual settlement rather than
pursuing litigation. The settlement, consistent with the views of the global
creditor base, will enable LBHI to accelerate distributions to creditors with
allowed claims."

Tony Lomas, LBIE Joint Administrator, said, "This is a defining transaction
for the LBIE estate and one in which the whole LBIE team has played an
important part. The depth and complexity of the business relationship between
LBIE and LBI, the Client and House components, the different insolvency
regimes and the sheer size of the claims in both directions makes this by some
significant margin the most complex inter affiliate settlement completed in
the Lehman insolvency. It paves the way for a $9 billion consensual asset
return plan for LBIE's underlying Omnibus claimants and will also enable us to
set a clearer path to address a number of the remaining issues for our
unsecured creditor estate, as well as members of our client money and client
asset communities."

The LBIE Joint Administrators continue to target the end of February to
publish the terms of their consensual proposal to the underlying Omnibus
claimants, on how the recovery proceeds will be distributed amongst them. In
addition, LBIE intends to provide claimants with an update on the portfolio of
the securities that are set to be returned under the LBI settlement agreement
as well as an update into the likely financial impact of the agreement in its
next progress report, due by mid-April.

Certain deal terms of both settlements are summarized below and the filings
related to the LBI settlement agreement can be found at www.lehman-docket.com
in the "Key Documents" section.


For LBI : Media - US: Jake Sargent +1-202-569-5086 ; UK: James Acheson-Gray:
+44-772-520-6970. Additional information and filings:

For LBHI : Media - Kimberly Macleod, kmacleod@lehmanholdings.com ,
+1-646-285-9215 Questions relating to these filings can be directed to the
Debtors' claims agent, Epiq Systems, Inc., at 1-866-879-0688 (U.S.) and
1-503-597-7691 (Non-U.S.).

For LBIE: Media - Stephanie Howel, stephanie.howel@uk.pwc.com , tel:
+44(0)20-7213-2421, mob: +44(0)7734-456098 Counterparties - Should you have
any queries regarding this update, please contact LBIE's Communications and
Counterparty Management team at generalqueries@lbia-eu.com . The Joint
Administrators will continue to communicate with you through this website on
all matters relating to the administration of LBIE.

CERTAIN TERMS OF THE SETTLEMENT AGREEMENTS Certain of the deal terms of both
settlements are summarized below, however, parties should review the
agreements filed with the court as those terms are controlling.

Certain key terms of the LBI/LBHI agreement are set out below:

  *LBHI's customer claims against LBI will be allowed in an amount of $2.320
    billion (valued as of September 19, 2008), in respect of which LBHI will
    receive the following distribution: (1) a cash distribution of $1.977
    billion from the LBI estate, which includes cash in lieu of certain
    securities and cash receipts from post-petition redemptions and maturities
    in connection with certain securities, (2) $350 million of consideration
    from Lehman ALI Inc. in the form of an assignment of a settled
    intercompany note between Lehman ALI Inc. and LBI to LBHI, LOTC and LBSF,
    and (3) the return of securities from the LBI estate.
  *LBI will allow LBHI a claim for post-petition dividends and interest
    through December 31, 2012, of approximately $122 million, as well as any
    other post-petition dividends and interest collected by the Trustee with
    respect to securities that make up LBHI's allowed customer claims.
  *LBI will allow LBHI a $240 million priority unsecured claim in connection
    with certain tax-related disputes resolved through the settlement.
  *LBHI will be allowed general unsecured claims of $13.984 billion
    (including $1.5 billion relating to a subrogated claim by JP Morgan
    against LBI).
  *The settlement is conditional on numerous items including the Trustee
    achieving 100% payout on remaining customer claims.

The key terms of the LBI/LBIE agreement (which are consistent with the outline
terms agreed in principle in October 2012) are set out below.

  *LBIE's Omnibus customer claim against LBI will be allowed in an amount of
    approximately $7.5 billion (valued as of September 19, 2008). Taking a
    November 30, 2012, value date, LBIE values the settled claim in the amount
    of approximately $8.4 billion made up of cash and securities, and this
    claim will be augmented by post-filing income of approximately $600
  *LBIE's House claim against LBI will be allowed in an amount of exactly
    $500 million in cash as a customer claim and a further amount of exactly
    $4.0 billion as a general estate claim. LBI's unsecured claim against
    LBIE will be eliminated entirely.
  *LBI's Client Money claim against LBIE and the former's custodied assets
    held by LBIE will be assigned to LBIE's nominee and LBIE respectively.
  *LBI will create a reserve of exactly $777 million to deal with certain
    claims into LBIE from Barclays Capital Inc. arising from the LBI/Barclays
    Asset Purchase Agreement dated September 16, 2008.
  *All litigation will cease between the parties and all other claims will be
  *The settlement is conditional on the following:

       *The elimination of duplicate claims filed by claimants into the LBI
         estate. This is intended to ensure that no unnecessary reserves are
         required to be made by LBI that will dilute distributions to customer
         property claimants and similarly ensure that claimants do not make a
         double recovery.
       *The Trustee achieving 100% payout on remaining customer property
       *The approval of the Post Filing Income methodology which shares post
         filing dividends and interest amongst customer property claimants
         according to the actual securities distributed by LBI.
       *The approval of the Trustee's allocation motion to identify the
         amount of realizations to be credited as customer property.
       *Receipt of U.S. Bankruptcy Court approval and an order of the English
         High Court for the LBI/LBIE agreement and U.S. Bankruptcy Court
         approval for the LBI/LBHI agreement.
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