Joint Venture Planned to Facilitate Resolution of LBIE Claims

  Joint Venture Planned to Facilitate Resolution of LBIE Claims

Business Wire

NEW YORK -- November 21, 2013

Lehman Brothers Holdings Intermediate 2 Ltd. (“LBHI2”), Lehman Brothers
Holdings Inc. (“LBHI”), Elliott Management Corporation (“Elliott”) and King
Street Capital Management, L.P. (“KS” and together with Elliott, the “Funds”)
entered into commitment letters, subject to final documentation, to create a
strategic joint venture (the “Joint Venture”) that aligns their interests in
Lehman Brothers International (Europe) (in administration) (“LBIE”).

LBHI2 will contribute to the Joint Venture the economic interests of its
senior and subordinated claims (approximately GBP 1.3 billion) against and
preferred equity in LBIE. The Funds will pay approximately GBP 650 million to
LBHI2 and contribute to the Joint Venture the distributions on their claims
against LBIE (equaling approximately GBP 2.6 billion as of September 30, 2013)
in excess of the principal amount plus post-administration interest at 8% per

The Joint Venture includes a joint recovery pool which is governed by a
specified sharing formula. Distributions from the recovery pool will be made
to LBHI2 and the Funds either out of the recovery pool, or based on certain
contractual arrangements among the parties and certain of their affiliates, on
a quarterly basis as follows: (i) the first GPB 650 million will be paid to
the Funds; (ii) the next GBP 650 million (plus interest) will be split 70% to
the Funds and 30% to LBHI2; (iii) the next GBP 900 million (plus interest)
will be split 50%/50% between the Funds and LBHI2; and (iv) any additional
distributions will be split 75% to LBHI2 and 25% to the Funds.

The Parties have also agreed through the Joint Venture to collaborate on a
wide range of matters pertaining to LBIE.

Neither LBHI nor LBHI2 may encourage, negotiate, or accept any offers or
proposals from any other party relating to the Joint Venture or any similar
transaction. LBHI and LBHI2 are obligated to advise each of the Funds of any
offer or proposal relating to a competing transaction that may be received.

The rights and obligations of the parties under the commitment letters will
terminate on January 31, 2014, subject to extension to February 28, 2014 in
certain circumstances.

A more detailed summary of the terms of the parties’ commitments and the Joint
Venture is available at  in the key documents section.

There can be no assurance that the Joint Venture will be completed. Even if
completed, the final terms of the Joint Venture may differ from the terms
described above.


Lehman Brothers Holdings Inc.
Kimberly Macleod, 646-285-9215
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