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8-K - 8-K - LEHMAN BROTHERS HOLDINGS INC. PLAN TRUST | d101148d8k.htm |
Exhibit 99.1
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
In re:
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Chapter 11 Case No.
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Lehman Brothers Holdings Inc., et al., | 08-13555 | |||
Jointly Administered | ||||
Debtors. |
QUARTERLY FINANCIAL REPORT
AS OF OCTOBER 1, 2020
DEBTORS ADDRESS: | LEHMAN BROTHERS HOLDINGS INC. | |
c/o KRISTINE DICKSON CHIEF FINANCIAL OFFICER | ||
110 EAST 42ND STREET | ||
SUITE 820 | ||
NEW YORK, NY 10017 | ||
DEBTORS ATTORNEYS: | WEIL, GOTSHAL & MANGES LLP | |
c/o JACQUELINE MARCUS, GARRETT A. FAIL | ||
767 FIFTH AVENUE | ||
NEW YORK, NY 10153 | ||
REPORT PREPARER: | LEHMAN BROTHERS HOLDINGS INC., AS PLAN ADMINISTRATOR |
Date: December 21, 2020
Quarterly Financial Report as of October 1, 2020 (Unaudited)
Table of Contents
I. |
Schedule of Debtors |
3 | ||||
II. |
Cash Flow Estimates |
4 | ||||
III. |
Notes to the Cash Flow Estimates |
7 | ||||
Note 1 - Basis of Presentation | 7 | |||||
Note 2 - Other Receipts | 10 | |||||
Note 3 - Due from/to Non-Controlled Affiliates | 11 | |||||
Note 4 - Due from/to Debtors and LBHI-Controlled Entities | 14 | |||||
Note 5 - Disputed Claims | 15 | |||||
Note 6 - Legal Proceedings | 16 | |||||
Note 7 - Taxes Payable | 20 | |||||
IV. |
Balance Sheets |
21 |
QUESTIONS
The Company has established an email address to receive questions from readers regarding this presentation and its other financial disclosures. The Company plans to review questions received, and for those subjects which the Company determines a response would not (i) violate a confidentiality provision, (ii) place the Company in a competitive or negotiation disadvantage, or (iii) be unduly burdensome relative to the value of information requested, the Company shall endeavor to post a response on the website listed below (maintaining the anonymity of the originators of the questions). The Company assumes no obligation to respond to email inquiries.
Please email questions, with document references as relevant, to:
QUESTIONS@lehmanholdings.com
The Companys previously posted responses can be found on the Epiq website maintained for the Company:
www.lehman-docket.com under the Key Documents tab and the Responses to Questions Submitted category
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Page 2 |
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Quarterly Financial Report as of October 1, 2020 (Unaudited)
I. Schedule of Debtors
The twenty three entities listed below (the Debtors) filed for bankruptcy in the United States Bankruptcy Court for the Southern District of New York (the Bankruptcy Court) on the dates indicated below. On December 6, 2011, the Bankruptcy Court confirmed the Modified Third Amended Joint Chapter 11 Plan of Lehman Brothers Holdings Inc. and its Affiliated Debtors (the Plan). On March 6, 2012, the Effective Date (as defined in the Plan) occurred. As of the date hereof, the following Debtors chapter 11 cases remain open:
Case No. | Date Filed (Commencement Date) |
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Lehman Brothers Holdings Inc. (LBHI) |
08-13555 | 9/15/2008 | ||||||
Lehman Brothers Special Financing Inc. (LBSF) |
08-13888 | 10/3/2008 |
The following Debtors chapter 11 cases were closed pursuant to final decrees entered by the Bankruptcy Court (Docket No. 51920, No. 54163, No. 58257, No. 59472 and No. 60623):
Case No. | Date Filed | Date Closed | ||||||||||
LB 745 LLC |
08-13600 | 09/16/2008 | 01/28/2016 | |||||||||
PAMI Statler Arms LLC |
08-13664 | 09/23/2008 | 01/28/2016 | |||||||||
CES Aviation LLC |
08-13905 | 10/05/2008 | 01/28/2016 | |||||||||
CES Aviation V LLC |
08-13906 | 10/05/2008 | 01/28/2016 | |||||||||
CES Aviation IX LLC |
08-13907 | 10/05/2008 | 01/28/2016 | |||||||||
LB 2080 Kalakaua Owners LLC |
09-12516 | 04/23/2009 | 01/28/2016 | |||||||||
LB Somerset LLC |
09-17503 | 12/22/2009 | 01/28/2016 | |||||||||
LB Preferred Somerset LLC |
09-17505 | 12/22/2009 | 01/28/2016 | |||||||||
East Dover Limited |
08-13908 | 10/05/2008 | 12/15/2016 | |||||||||
Luxembourg Residential Properties Loan Finance S.a.r.l. |
09-10108 | 01/07/2009 | 12/15/2016 | |||||||||
Merit LLC |
09-17331 | 12/14/2009 | 12/15/2016 | |||||||||
Lehman Brothers Derivative Products Inc. (LBDP) |
08-13899 | 10/05/2008 | 06/14/2018 | |||||||||
Lehman Brothers Financial Products Inc. (LBFP) |
08-13902 | 10/05/2008 | 06/14/2018 | |||||||||
Lehman Scottish Finance L.P. |
08-13904 | 10/05/2008 | 06/14/2018 | |||||||||
LB Rose Ranch LLC |
09-10560 | 02/09/2009 | 06/14/2018 | |||||||||
Lehman Brothers Commodity Services Inc. (LBCS) |
08-13902 | 10/03/2008 | 02/11/2019 | |||||||||
Lehman Brothers Commercial Corporation (LBCC) |
08-13901 | 10/05/2008 | 02/11/2019 | |||||||||
Structured Asset Securities Corporation |
09-10558 | 02/09/2009 | 02/11/2019 | |||||||||
Lehman Brothers OTC Derivatives Inc. (LOTC) |
08-13893 | 10/03/2008 | 05/04/2020 | |||||||||
Lehman Brothers Commercial Paper Inc. (LCPI) |
08-13900 | 10/05/2008 | 05/04/2020 | |||||||||
BNC Mortgage LLC |
09-10137 | 01/09/2009 | 05/04/2020 |
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Quarterly Financial Report as of October 1, 2020 (Unaudited)
II. Cash Flow Estimates
Lehman Brothers Holdings Inc. & LBHI-Controlled Entities
($in millions)
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As of 06/30/20 |
Cash Activity 7/1/20 - 10/01/20 |
Estimate Changes |
Transfers, Reclassifications, Adjustments |
As of 10/01/20 |
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CASH AND INVESTMENTS |
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Reserves for Claims |
$ | 46 | $ | | $ | 2 | $ | | $ | 48 | ||||||||||||||
Reserves for Operating Expenses, Incentive Fees, and Other |
107 | (12 | ) | 24 | | 120 | ||||||||||||||||||
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Total Cash & Investments - Restricted |
153 | (12 | ) | 27 | | 168 | ||||||||||||||||||
Total Cash & Investments - Unrestricted |
170 | (61 | ) | (27 | ) | | 82 | |||||||||||||||||
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TOTAL CASH AND INVESTMENTS [A] |
$ | 323 | $ | (73 | ) | $ | | $ | | 250 | ||||||||||||||
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CASH FLOW ESTIMATES |
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Net Receipts |
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Financial Instruments |
$ | 36 | $ | (31 | ) | $ | 39 | $ | | 44 | ||||||||||||||
Other |
Note 2 | 78 | (9 | ) | 4 | 0 | 73 | |||||||||||||||||
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Sub-Total - Net Receipts |
114 | (40 | ) | 43 | 0 | 117 | ||||||||||||||||||
Recoveries From Non-Controlled Affiliates |
Note 3 | |||||||||||||||||||||||
Europe |
1,138 | (21 | ) | 35 | | 1,152 | ||||||||||||||||||
Asia |
50 | | 5 | | 55 | |||||||||||||||||||
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Sub-Total - Recoveries From Non-Controlled Affiliates |
1,188 | (21 | ) | 40 | | 1,208 | ||||||||||||||||||
Recoveries From Controlled Affiliates |
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Pre-Petition Intercompany Receipts |
Note 4 | 5 | | (0 | ) | | 5 | |||||||||||||||||
Net Post-Petition Intercompany Receipts from / (Payables to) |
2 | (2 | ) | 0 | | 0 | ||||||||||||||||||
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Sub-Total - Recoveries From Controlled Affiliates |
7 | (2 | ) | 0 | | 5 | ||||||||||||||||||
Operating Expenses and Incentive Fees |
(113 | ) | 12 | (23 | ) | | (124 | ) | ||||||||||||||||
Estimated Taxes Payable |
Note 7 | (37 | ) | | 5 | | (32 | ) | ||||||||||||||||
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TOTAL CASH FLOW FROM OPERATIONS + OTHER RECEIPTS [B] |
$ | 1,159 | $ | (51 | ) | $ | 65 | $ | 0 | 1,174 | ||||||||||||||
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OTHER ADJUSTMENTS |
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(Less): Cash held for the benefit of third parties (a) |
$ | (25 | ) | $ | | $ | (2 | ) | $ | | (27 | ) | ||||||||||||
Plus: Plan Adjustments from Participatory Debtor |
1 | | | | 1 | |||||||||||||||||||
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TOTAL OTHER ADJUSTMENTS [C] |
$ | (24 | ) | $ | | $ | (2 | ) | $ | | (26 | ) | ||||||||||||
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ESTIMATED CASH AVAILABLE FOR DISTRIBUTIONS [A+B+C] |
$ | 1,458 | $ | (124 | ) | $ | 63 | $ | 0 | 1,398 | ||||||||||||||
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(a) | Cash held for the benefit of third parties includes Distributions on Allowed Claims (not remitted) and other items. |
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Quarterly Financial Report as of October 1, 2020 (Unaudited)
Lehman Brothers Special Financing Inc.
($in millions)
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As of 06/30/20 |
Cash Activity 7/1/20 - 10/01/20 |
Estimate Changes |
Transfers, Reclassifications, Adjustments |
As of 10/01/20 |
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CASH AND INVESTMENTS |
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Reserves for Claims |
$ | 0 | $ | | $ | (0 | ) | 0 | ||||||||||||||||
Reserves for Operating Expenses, Incentive Fees, and Other |
5 | (2 | ) | (0 | ) | | 3 | |||||||||||||||||
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Total Cash & Investments - Restricted |
5 | (2 | ) | (0 | ) | | 3 | |||||||||||||||||
Total Cash & Investments - Unrestricted |
4 | 1 | 0 | | 5 | |||||||||||||||||||
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TOTAL CASH AND INVESTMENTS [A] |
$ | 9 | $ | (1 | ) | $ | | $ | | 8 | ||||||||||||||
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CASH FLOW ESTIMATES |
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Net Receipts |
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Financial Instruments |
$ | 7 | $ | (0 | ) | $ | (1 | ) | $ | | 6 | |||||||||||||
Other |
Note 2 | 0 | (0 | ) | 0 | | 0 | |||||||||||||||||
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Sub-Total - Net Receipts |
8 | (0 | ) | (1 | ) | | 7 | |||||||||||||||||
Recoveries From Non-Controlled Affiliates |
Note 3 | |||||||||||||||||||||||
Europe |
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Asia |
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Sub-Total - Recoveries From Non-Controlled Affiliates |
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Recoveries From Controlled Affiliates |
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Pre-Petition Intercompany Receipts |
Note 4 | | | | | | ||||||||||||||||||
Net Post-Petition Intercompany Receipts from / (Payables to) |
(2 | ) | 2 | (0 | ) | | (0 | ) | ||||||||||||||||
Investments in Affiliates |
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Sub-Total - Recoveries From Controlled Affiliates |
(2 | ) | 2 | (0 | ) | | (0 | ) | ||||||||||||||||
Operating Expenses and Incentive Fees |
(4 | ) | 0 | 0 | | (4 | ) | |||||||||||||||||
Estimated Taxes Payable |
Note 7 | | | | | | ||||||||||||||||||
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TOTAL CASH FLOW FROM OPERATIONS + OTHER RECEIPTS [B] |
$ | 2 | $ | 2 | $ | (1 | ) | $ | | 3 | ||||||||||||||
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OTHER ADJUSTMENTS |
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(Less): Cash held for the benefit of third parties |
$ | (0 | ) | $ | | $ | 0 | $ | | (0 | ) | |||||||||||||
(Less): Plan Adjustments to Participatory Debtor |
(1 | ) | | | | (1 | ) | |||||||||||||||||
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TOTAL OTHER ADJUSTMENTS [C] |
$ | (1 | ) | $ | | $ | 0 | $ | | (1 | ) | |||||||||||||
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ESTIMATED CASH AVAILABLE FOR DISTRIBUTIONS [A+B+C] |
$ | 10 | $ | 0 | $ | (1 | ) | $ | | 10 | ||||||||||||||
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Note: totals may not foot due to rounding.
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Quarterly Financial Report as of October 1, 2020 (Unaudited)
Estimated Remaining Creditor Recoveries, By Debtor
The following schedules show the estimated remaining recoveries for each of LBHI and LBSF by claim class, based on the Estimated Cash Available for Distributions in the preceding tables. The estimated remaining recoveries on the previous pages and the schedules below do not include (a) potential recoveries from the Excluded Litigations, and (b) estimates for potential allowed amounts of disputed claims.
($in millions)
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Lehman Brothers Holdings Inc. | ||||||||||||||||||||||
Allowed Claims Eligible for Distributions(1) |
Estimated Remaining Recovery |
Estimated Remaining Recovery % as of 10.01.2020 |
Actual Recovery % Thru D21 |
Estimated End of Case Recovery % |
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Class |
Designation |
$ | $ | A | B | = A + B | ||||||||||||||||
3 |
Senior Unsecured |
$ | 82,542 | $ | 716 | 0.868 | % | 46.127 | % | 46.995 | % | |||||||||||
4A |
Senior Affiliate Claims |
33,571 | 260 | 0.774 | % | 37.121 | % | 37.895 | % | |||||||||||||
4B |
Senior Affiliate Guarantee |
10,463 | 79 | 0.757 | % | 36.222 | % | 36.979 | % | |||||||||||||
5 |
Senior Third-Party Guarantee |
31,706 | 192 | 0.606 | % | 28.982 | % | 29.588 | % | |||||||||||||
7 |
General Unsecured |
5,242 | 42 | 0.805 | % | 43.185 | % | 43.990 | % | |||||||||||||
8 |
Derivative Affiliate / Affiliate Guarantee Claims |
451 | 3 | 0.712 | % | 34.105 | % | 34.816 | % | |||||||||||||
9A |
Third Party Guarantee Derivatives |
18,255 | 104 | 0.569 | % | 27.281 | % | 27.850 | % | |||||||||||||
9B |
Third Party Guarantee Derivatives RACERs |
| | 0.346 | % | 16.586 | % | 16.932 | % | |||||||||||||
10A |
Subordinated Class 10A Claims |
3,399 | | | | | ||||||||||||||||
10B |
Subordinated Class 10B Claims |
10,330 | | | | | ||||||||||||||||
10C |
Subordinated Class 10C Claims |
1,493 | | | | | ||||||||||||||||
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Total |
$ | 197,453 | $ | 1,398 | ||||||||||||||||||
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Lehman Brothers Special Financing Inc.
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Allowed Claims Eligible for Distributions(1) |
Estimated Remaining Recovery |
Estimated Remaining Recovery % as of 10.01.2020 |
Actual Recovery % Thru D20 |
Estimated End of Case Recovery % |
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Class |
Designation |
$ | $ | A | B | = A + B | ||||||||||||||||
4A |
GUC not Designated Entities |
$ | 19,675 | $ | 5 | 0.025 | % | 40.365 | % | 40.391 | % | |||||||||||
4B |
GUC Designated Entities |
1,948 | 0 | 0.013 | % | 20.467 | % | 20.480 | % | |||||||||||||
5A |
Affiliate Claims of LBHI |
15,173 | 4 | 0.027 | % | 40.954 | % | 40.981 | % | |||||||||||||
5B |
Affiliate Claims of Participating Subs |
522 | 0 | 0.022 | % | 33.650 | % | 33.671 | % | |||||||||||||
5C |
Affiliate claims |
1,689 | 0 | 0.025 | % | 39.864 | % | 39.890 | % | |||||||||||||
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Total |
$ | 39,006 | $ | 10 | ||||||||||||||||||
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(1) | Estimated Recovery percentages are calculated based on recoveries of Allowed Claims Eligible for Distributions as reported on Exhibit D of the 21st Distribution Notice filed on September 24, 2020 [Docket No. 60878]. For purposes of this illustrative calculation only: |
a. | Allowed claims exclude (i) claims against LBHI satisfied in full through the combination of the primary obligor and guarantee distributions from LBHI, and (ii) previously Allowed Claims that have been withdrawn. |
b. | Disputed claims are assumed to be allowed at zero, and all cash reserves currently held on behalf of holders of disputed claims are assumed to be released for the benefit of all holders of Allowed Claims. |
c. | Allowed Claims Eligible for Distributions exclude Allowed Claims that each Debtor owns against itself. |
(2) | Through the 21st Plan Distribution on October 1, 2020 (D21), the Debtors have made distributions to creditors totaling $128.2 billion, of which $95.3 billion were payments on account of claims owned or formerly owned by third party creditors. |
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Quarterly Financial Report as of October 1, 2020 (Unaudited)
III. Notes to the Cash Flow Estimates
Note 1 Basis of Presentation
Objectives
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Page 7 |
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Quarterly Financial Report as of October 1, 2020 (Unaudited)
Note 1 Basis of Presentation (continued)
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Page 8 |
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Quarterly Financial Report as of October 1, 2020 (Unaudited)
Note 1 Basis of Presentation (continued)
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Page 9 |
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Quarterly Financial Report as of October 1, 2020 (Unaudited)
Note 2 Other Receipts
The following table summarizes the main components of Other Receipts as of October 1, 2020:
Debtors | Debtor- | |||||||||||
Controlled | ||||||||||||
$ in millions |
LBHI | LBSF | Entities | |||||||||
Affiliate Claims (1) |
68 | | | |||||||||
Other |
1 | 0 | 3 |
(1) | Includes $68 million of claims against Non-Controlled Affiliates acquired through settlements with third parties valued at estimated remaining recoveries. The largest component of Affiliate Claims is an admitted claim, prior to distributions, against Lehman Brothers Limited for £66 million. |
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Quarterly Financial Report as of October 1, 2020 (Unaudited)
Note 3 Due from/to Non-Controlled Affiliates
The following table presents, on an aggregate basis for LBHI and LBHI-Controlled Entities, admitted and unsettled filed claims (including statutory interest to date), collections to date from Non-Controlled Affiliates, and aggregate estimated remaining recoveries (including statutory interest):
Estimated Recoveries (4) |
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$ in millions |
Local Currency |
Admitted Claims in Local Currency (2) |
Collections To Date in Local Currency (2) |
Admitted and Unsettled Filed Claims in USD (3) |
Collections To Date in USD (2) |
Net Receivables in USD |
LBHI & LBHI- Controlled Entities |
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Europe |
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Lehman Brothers Finance S.A. |
CHF | 10,153 | (2,087 | ) | 11,049 | (2,271 | ) | 8,778 | ||||||||||||||||||||
Lehman Brothers Holdings Intermediate 2 Ltd - Subordinated |
USD | 6,139 | | 6,139 | ||||||||||||||||||||||||
Lehman Brothers Holdings Intermediate 2 Ltd - Senior |
GBP | 871 | (871 | ) | 1,122 | (1,122 | ) | | ||||||||||||||||||||
Lehman Brothers Holdings PLC - Subordinated |
USD | 1,900 | | 1,900 | ||||||||||||||||||||||||
Lehman Brothers Holdings PLC - Senior |
GBP | 237 | (236 | ) | 306 | (304 | ) | 2 | ||||||||||||||||||||
Thayer Properties Limited |
GBP | 172 | (92 | ) | 221 | (119 | ) | 102 | ||||||||||||||||||||
LB (PTG) Ltd |
GBP | 170 | (91 | ) | 219 | (117 | ) | 102 | ||||||||||||||||||||
LB ODC 3 |
GBP | 101 | (62 | ) | 130 | (80 | ) | 51 | ||||||||||||||||||||
Other |
1,886 | (1,864 | ) | 23 | ||||||||||||||||||||||||
Recoveries of Prior Guarantee Distributions (1) |
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Total Europe |
22,972 | (5,876 | ) | 17,096 | 1,152 | |||||||||||||||||||||||
Asia |
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LB Commercial Corp. Asia Limited |
HKD | 14,769 | (9,118 | ) | 1,906 | (1,176 | ) | 729 | ||||||||||||||||||||
LB Asia Pacific (Singapore) PTE |
USD | 621 | (364 | ) | 621 | (364 | ) | 258 | ||||||||||||||||||||
LB Investments PTE Ltd |
USD | 536 | (342 | ) | 536 | (342 | ) | 194 | ||||||||||||||||||||
LB RE Australia Commerical PTY LTD |
AUD | 218 | (66 | ) | 156 | (47 | ) | 109 | ||||||||||||||||||||
LB Australia Holdings PTY LTD |
AUD | 145 | (63 | ) | 104 | (45 | ) | 59 | ||||||||||||||||||||
Lehman Brothers Australia Ltd |
AUD | 111 | (66 | ) | 80 | (48 | ) | 32 | ||||||||||||||||||||
Other |
11,097 | (11,054 | ) | 42 | ||||||||||||||||||||||||
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Total Asia |
14,501 | (13,077 | ) | 1,424 | 55 | |||||||||||||||||||||||
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Total |
$ | 37,473 | $ | (18,953 | ) | $ | 18,520 | $ | 1,208 | |||||||||||||||||||
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Totals may not foot due to rounding. |
(1) | The Companys Estimated Recoveries include estimates for recoveries related to prior distributions on Allowed Guarantee Claims against LBHI that are or are expected to be satisfied in full. |
(2) | Admitted Claims in Local Currency, Collections to Date in Local Currency and Collections to Date in USD include statutory interest received to date less any distributions received on the claims prior to the assignments of the claims to LBHI and/or LBHI-Controlled Entities. |
(3) | Admitted and Unsettled Filed Claims in USD includes notional amounts on subordinated receivables and statutory interest. |
(4) | Refer to Note 1 Basis of Presentation herein for further information on the estimated recoveries from Non-Controlled Affiliates. |
(5) | Other claims against Lehman Brothers Finance S.A. and LBIE acquired through settlements with third parties are included in Other Assets (refer to Note 2 Other Receipts for additional information). |
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Page 11 |
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Quarterly Financial Report as of October 1, 2020 (Unaudited)
Note 3 Due from/to Non-Controlled Affiliates (continued)
The table below presents the Due from/to Non-Controlled Affiliates balances as of October 1, 2020, and the related activity since the previously filed Quarterly Financial Report as of June 30, 2020:
Activity 7/01/20 - 10/01/20 | ||||||||||||||||||||||||
$ in millions | As of June 30, 2020 |
Cash Receipts | Cash Distributions |
Claim Assignments |
Other (1) | As of October 1, 2020 |
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Due From Non-Controlled |
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Lehman Brothers Finance S.A. |
$ | 8,519 | $ | 260 | $ | 8,778 | ||||||||||||||||||
LB Holdings Intermediate 2 Ltd - Subordinated (2) |
773 | 5,366 | 6,139 | |||||||||||||||||||||
Lehman Brothers Holdings PLC - Subordinated (2) |
| 1,900 | 1,900 | |||||||||||||||||||||
Thayer Properties Limited |
98 | 4 | 102 | |||||||||||||||||||||
LB (PTG) Ltd |
98 | 4 | 102 | |||||||||||||||||||||
LB Commercial Corp. Asia Limited |
729 | 0 | 729 | |||||||||||||||||||||
LB Asia Pacific (Singapore) PTE |
258 | 0 | 258 | |||||||||||||||||||||
LB Investments PTE Ltd |
194 | | 194 | |||||||||||||||||||||
Other |
325 | (21 | ) | | 14 | 318 | ||||||||||||||||||
Due To Non-Controlled (3) |
$ | 29,661 | $ | | $ | (31 | ) | $ | | $ | (0 | ) | $ | 29,631 |
(1) | Other includes $311 million resulting from the positive impact of movements in foreign exchange rates for the period calculated on the historical net receivable balances. |
(2) | Balances as of October 1, 2020 represent the notional subordinated receivables previously recorded at recovery values. |
(3) | Due to Non-Controlled balances from Debtors are included in Liabilities Subject to Compromise herein, and primarily include (i) claims against Debtors, net of distributions, originally held by Non-Controlled Affiliates that are currently held by third parties, and (ii) a claim held by Lehman Brothers Treasury Co B.V., in which LBHI has no direct or indirect equity interest. |
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Quarterly Financial Report as of October 1, 2020 (Unaudited)
Note 3 Due from/to Non-Controlled Affiliates (continued)
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Quarterly Financial Report as of October 1, 2020 (Unaudited)
Note 4 Due from/to Debtors and LBHI-Controlled Entities
The table below presents the Due from/to Debtors and LBHI-Controlled Entities balances as of October 1, 2020, and the related activity since the previously filed Quarterly Financial Report as of June 30, 2020:
Activity 7/01/20 - 10/01/20 | ||||||||||||||||||||||||
$ in millions | As of June 30, 2020 |
Cash Receipts | Cash Distributions |
Claim Assignments |
Other | As of October 1, 2020 |
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Due From Controlled |
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LB Special Financing Inc |
$ | 10,018 | $ | | $ | 10,018 | ||||||||||||||||||
RACERS Claims (1) |
525 | (1 | ) | | 525 | |||||||||||||||||||
Pami Ali LLC |
2,731 | | 2,731 | |||||||||||||||||||||
Lehman Ali Inc (PCO) |
1,928 | | 1,928 | |||||||||||||||||||||
LB I Group Inc (PCO) |
1,569 | (4 | ) | | 1,565 | |||||||||||||||||||
314 Commonwealth Ave Inc (PCO) |
784 | | 784 | |||||||||||||||||||||
Real Estate Private Equity Inc |
625 | | 625 | |||||||||||||||||||||
LB Offshore Partners Ltd |
340 | (0 | ) | | 340 | |||||||||||||||||||
Repe LBREP LP, LLC |
180 | (2 | ) | | 179 | |||||||||||||||||||
Other |
254 | 1 | $ | 255 | ||||||||||||||||||||
Due To Controlled (2) |
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Lehman Brothers Special Financing Inc. |
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Lehman Brothers Holdings Inc. |
$ | 10,018 | $ | 1 | $ | 10,019 | ||||||||||||||||||
LBHI-Controlled |
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Lehman Brothers Holdings Inc. |
8,412 | (6 | ) | $ | | 8,405 |
(1) | Refer to Section IV.I.b of the Disclosure Statement for further information on the RACERS Claims. |
(2) | Due to Controlled balances from Debtors are included in Liabilities Subject to Compromise herein. |
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Quarterly Financial Report as of October 1, 2020 (Unaudited)
Note 5 Disputed Claims
The table below presents the remaining Disputed Claims by Class and by Primary Obligor as of October 1, 2020:
$ in millions | ||||||||||||||||||||
Debtor/Class |
Total Number of Filed Claims |
Number of Unliquidated Claims |
Total Filed Amount |
Estimate of Disputed Claims for Reserve Purposes (2) |
Total Cash Reserves for Disputed Claims (3) |
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Lehman Brothers Holdings Inc. |
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2 Secured |
1 | 1 | $ | 6 | $ | | $ | | ||||||||||||
5 Senior Third-Party Guarantee (1) |
1 | | 8 | 5 | 0 | |||||||||||||||
LBIE |
1 | | 8 | 5 | 0 | |||||||||||||||
9A Third Party Guarantee other than of the RACERS Trusts (1) |
64 | | 1,075 | 810 | 26 | |||||||||||||||
LBIE |
63 | | 1,013 | 748 | 21 | |||||||||||||||
LBF |
1 | | 62 | 62 | 5 | |||||||||||||||
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Total - Lehman Brothers Holdings Inc. |
66 | 1 | $ | 1,089 | $ | 815 | $ | 26 |
(1) | The Disputed Claims relate to asserted guarantee obligations related to the primary obligor. |
(2) | Certain Claims have been estimated at less than filed amounts, for reserve purposes only, as agreed through stipulation or settlement agreement or pursuant to Court order. Unless otherwise agreed to or ordered by the Court, there is no reserve for unliquidated Claims. |
(3) | In addition to cash, assets are being maintained as reserves for certain claims pursuant to agreements with creditors and/or Bankruptcy Court order. |
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Quarterly Financial Report as of October 1, 2020 (Unaudited)
Note 6 Legal Proceedings
The Company is involved in or will be impacted by a number of judicial, regulatory and mediation proceedings concerning matters arising in connection with the bankruptcy proceedings and various other matters, including the proceedings listed below. The Company has not included in the October 1, 2020 Cash Flow Estimates any estimate of recoveries for the Excluded Litigations in the table shown below, but has included estimates of recoveries for all other affirmative litigation matters it is pursuing. The Company is not aware of any other litigation matters where the amount at issue exceeds $10 million. As more information becomes available, the Company may record revisions, which may be material, in future Quarterly Financial Reports. (See Note 1 - Basis of Presentation - Litigation for further discussion on the impact of these litigations on the cash flow estimates.)
EXCLUDED LITIGATIONS |
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Counterparty |
Debtor(s) | Commenced | Court | Court Reference |
Most Recent Disclosure |
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Mortgage Sellers |
LBHI | Various | Various | Various | (a) | |||||||||||
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Bank of America National Association et al. (SPV Avoidance Actions) |
LBSF | September 2010 | Bankruptcy Court | 10-03547 | (SCC) | |
June 30, 2020 Balance Sheets - Docket No. 60877 |
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Ballyrock ABS CDO 2007-1 Limited Wells Fargo Bank N.A. (Ballyrock Litigation) |
LBSF | February 2009 | Bankruptcy Court | |
09-01032 |
(SCC) |
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June 30, 2020 Balance Sheets - Docket No. 60877 |
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OTHER LITIGATIONS |
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Counterparty |
Controlled Entities Party to Litigation |
Debtor(s) Potentially Impacted by Litigation |
Court | Most Recent Disclosure | ||||
PLC, LBHI2, LB GP No. 1 Ltd, Deutsche Bank (ECAPs) |
LBHI SLP3 |
LBHI | UK Court | (b) | ||||
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Guarantee Claims For Which LBIE Is The Primary Obligor |
LBHI | LBHI | Bankruptcy Court |
(c) | ||||
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LBIE Other |
None | LBHI | Various | (d) | ||||
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LBF Guarantee - Enasarco |
None | LBHI | Swiss Court | April 5, 2018 Balance Sheets - Docket No. 58442 | ||||
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Guarantee Clawbacks |
LBHI | LBHI | Bankruptcy Court |
(e) | ||||
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LBT Clawbacks |
LBHI | LBHI | Bankruptcy Court |
(f) | ||||
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Sweetwater |
LBHI | LBHI | Delaware Chancery Court |
June 30, 2020 Balance Sheets - Docket No. 60877 | ||||
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Quarterly Financial Report as of October 1, 2020 (Unaudited)
Note 6 Legal Proceedings (continued)
(a) Mortgage Sellers
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Quarterly Financial Report as of October 1, 2020 (Unaudited)
Note 6 Legal Proceedings (continued)
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Quarterly Financial Report as of October 1, 2020 (Unaudited)
Note 6 Legal Proceedings (continued)
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Quarterly Financial Report as of October 1, 2020 (Unaudited)
Note 7 Taxes Payable
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IV. Balance Sheets
LEHMAN BROTHERS HOLDINGS INC. and Other Debtors and LBHI-Controlled Entities
Balance Sheets As of October 1, 2020
(Unaudited)
($ in millions) |
Lehman Brothers Holdings Inc. 08-13555 |
Lehman Brothers Special Financing Inc. 08-13888 |
Total Debtor Entities (1) |
Total LBHI- Controlled Entities (2) |
Total Company |
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Assets |
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Cash and short-term investments |
$ | 27 | $ | 5 | $ | 32 | $ | 55 | $ | 87 | ||||||||||
Cash and short-term investments pledged or restricted |
155 | 3 | 158 | 13 | 171 | |||||||||||||||
Financial instruments and other inventory positions: |
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Commercial Real Estate |
3 | 0 | 3 | 0 | 3 | |||||||||||||||
Residential Real Estate and Other |
10 | (0 | ) | 10 | 0 | 10 | ||||||||||||||
Principal investments |
6 | (0 | ) | 6 | 26 | 31 | ||||||||||||||
Derivative Receivables and Related Assets |
| 6 | 6 | | 6 | |||||||||||||||
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Total Financial instruments and other inventory positions |
19 | 6 | 25 | 26 | 51 | |||||||||||||||
Receivables from Debtors and LBHI-Controlled Entities and other assets |
72 | 0 | 72 | 6 | 78 | |||||||||||||||
Investments in Affiliates |
(24,857 | ) | (0 | ) | (24,857 | ) | (22,663 | ) | (47,519 | ) | ||||||||||
Due from Affiliates: |
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Debtors and LBHI-Controlled Entities |
18,948 | 0 | 18,948 | 1 | 18,948 | |||||||||||||||
Non-Controlled Affiliates |
12,369 | (0 | ) | 12,369 | 6,151 | 18,520 | ||||||||||||||
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Total Due from Affiliates |
31,317 | (0 | ) | 31,317 | 6,151 | 37,468 | ||||||||||||||
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Total Assets |
$ | 6,733 | $ | 15 | $ | 6,748 | $ | (16,412 | ) | $ | (9,665 | ) | ||||||||
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Liabilities and Stockholders Equity |
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Liabilities |
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Payables to Debtors and LBHI-Controlled Entities and other liabilities |
$ | 21 | $ | 0 | $ | 21 | $ | 6 | $ | 27 | ||||||||||
Due to Affiliates: |
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LBHI-Controlled Entities |
$ | | | | 8,405 | 8,405 | ||||||||||||||
Non-Controlled Affiliates |
0 | | 0 | 30 | 30 | |||||||||||||||
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Total Due to Affiliates |
0 | | 0 | 8,435 | 8,435 | |||||||||||||||
Taxes Payable |
27 | (0 | ) | 27 | 5 | 32 | ||||||||||||||
Liabilities Subject to Compromise |
131,295 | 22,677 | 153,972 | | 153,972 | |||||||||||||||
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Total Liabilities |
131,343 | 22,677 | 154,020 | 8,446 | 162,466 | |||||||||||||||
Stockholders Equity |
(124,610 | ) | (22,663 | ) | (147,272 | ) | (24,858 | ) | (172,131 | ) | ||||||||||
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Total Liabilities and Stockholders Equity |
$ | 6,733 | $ | 15 | $ | 6,748 | $ | (16,412 | ) | $ | (9,665 | ) | ||||||||
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See accompanying Notes to Balance Sheets |
Note: All values that are exactly zero are shown as . Values between zero and $500,000 appear as 0.
(1) | Balances for Debtors do not reflect the impact of eliminations of intercompany balances and investments in subsidiaries. |
(2) | Balances for LBHI-Controlled Entities reflect the impact of eliminations of (i) intercompany balances only between LBHI-Controlled Entities and (ii) investments in subsidiaries only between LBHI-Controlled Entities. |
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